Mid Penn Bancorp, Inc.

2024 ANNUAL REPORT TO SHAREHOLDERS

Dear Fellow Shareholders,
At the end of last year’s shareholder letter, we cautioned our comments
about 2024 due to the ongoing difficulty of the operating environment,
particularly the inverted interest rate yield curve, persistent inflation,
ongoing geopolitical strife from two foreign wars, and a concern over 
the safety and soundness of commercial real estate across the country. 
Each of these factors was considered in the development of our 2024 
strategic plan, with the end result being a plan focused on the following: 
maintaining strong asset quality; controlling loan growth to preserve 
liquidity; improving core deposit growth; increasing net interest margin;
enhancing noninterest revenues; getting back to neutral or positive
operating leverage by controlling expenses; and continuing our legacy 
of community support in our operating activity, our charitable giving 
and our service hours. We are pleased to report to you in this letter that
we substantially accomplished each of our objectives in 2024 leading 
to what we feel is one of our best overall performances in the 16-year 
history with our current management team.
A LETTER TO OUR
SHAREHOLDERS
AS WE MOVE 
FORWARD, WE 
RECOGNIZE BOTH 
THE CHALLENGES 
AND THE 
OPPORTUNITIES 
IN THE EVOLVING 
ECONOMIC 
ENVIRONMENT.
RORY G. RITRIEVI
CHAIR, PRESIDENT,  AND
CHIEF EXECUTIVE OFFICER
JOHN E. NOONE
LEAD INDEPENDENT DIRECTOR
WE ARE PLEASED TO 
REPORT TO YOU...
WE SUBSTANTIALLY 
ACCOMPLISHED EACH 
OF OUR OBJECTIVES
IN 2024...

FINANCIAL YEAR IN REVIEW
With an intentionally restrained 4.5% organic increase in loans, a 7.9% organic increase in core deposits, a 16- 
basis point increase in net interest margin, a 0.0% net charge off ratio and a decrease in operating expenses, we
were able to deliver over 7% organic revenue growth, a 30% improvement in net income and a 26+% increase in
earnings per share in 2024. Those results put us in a position to not only pay a cash dividend of $0.80 per share 
for the year, but also improve our tangible book value per share by 9%. Most importantly, we also maintained
strong asset quality and enhanced our capital base both organically and through a follow-on capital raise 
completed in the fourth quarter. The result is a capital position entering FY2025 that allows us to continue that
balance sheet, revenue and profitability growth.
TOTAL SHAREHOLDER RETURN
The strong operating performance outlined above translated to another solid year of shareholder return, our true 
measurement of a successful year. For the year, our total shareholder return was 22.7%. For the last five years,
total shareholder return was 17.9% and for the last 10 years it is now 151.1%. Those return metrics place us in the
top quartile of our peer group while also outperforming the S&P over the ten-year period. In the tenure of the 
current management team, our total shareholder return is 318.8%.
BANKING ACTIVITY ACROSS THE FOOTPRINT
As mentioned above, we intentionally softened our loan growth in 2024 in order to preserve liquidity and to
lower the concentration of commercial real estate loans we hold. That does not me
however, that our lenders were not active. In 2024, with $713.5 million in commerc
loan production, $130.7 million in residential mortgage production and $35.6 mill
in consumer loan production, we originated a total of $879.8 million in new loa
marking the fifth-highest level of overall production in the last 16 years. Our lend
activity throughout PA, NJ, and DE is important to the economic activity and financ
stability of each of the communities in which we operate. While we remained act
lenders, we also developed new deposit relationships to fund those loans. In fa
we achieved $1.82 of deposit growth for each $1.00 of loan growth, which w
helpful in not only improving liquidity but also in increasing our net interest marg
Beyond loans and deposits, we also recognized measurable increases in assets und
management and insurance revenues, both of which drive noninterest income grow
Our business development bankers throughout the company excelled in delivering
of the products and services we offer to businesses, individuals and municipalities across our footprint.
INVESTMENT IN OUR CUSTOMERS
Throughout 2024, we focused on expanding our physical market presence while also enhancing our digital 
banking capabilities including an expansion of the team that delivers those capabilities to our customers. While 
we are committed to making it easier and more efficient for our customers to conduct their banking activity with us 
at a time most convenient for them, we are also committed to advancing the systems we and our customers rely on
to maintain a world-class security posture. The latter commitment remains unwavering and is at the core of every
investment we make in technology-driven banking. Fraudsters are becoming increasingly more sophisticated and
so must our education, detection, prevention and enforcement to continue to effectively stop them.
EXPANSION OF EXISTING MARKETS
We entered the Greater Philadelphia region in 2018 with the acquisition of Chester County based First Priority 
Bank. Since that time, we have organically grown our presence in that region by more than 10% on average each 
year, such growth being supplemented by an additional acquisition in 2023. To build on that success, in 2024 
we announced our plan for new financial centers in Camden, NJ, and Wayne, PA, both of which are now open. 
And to further increase our presence in that strategically important market, in November 2024 we announced 
p
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across our footprint
WE ARE COMMITTED
TO ADVANCING THE
SYSTEMS WE AND OUR
CUSTOMERS RELY ON 
TO MAINTAIN A 
WORLDCLASS 
SECURITY POSTURE.

our intention to merge with William Penn Bank of Bucks County. Upon completion of the merger, we will have 
financial centers in the western suburbs of Philadelphia as well as within the city of Philadelphia and in Southern 
New Jersey, giving us a meaningful presence throughout the area.
With over six million residents, hundreds of thousands of businesses and dozens of strong municipalities, we feel 
the Philadelphia market is among the best in the country for the delivery of the type of banking products and 
services we offer. This move aligns with our long-term vision of creating sustainable and profitable growth driven by 
deepening relationships throughout all of the communities we serve.
COMMUNITY INVESTMENT
Our ongoing commitment to the communities we serve is a real source of pride for all Mid Penn stakeholders. 
Through our employee volunteerism, financial education programs, signature philanthropic endeavors and ongoing 
giving initiatives, we have strengthened each community in which we have a financial center beyond the provision
of loans, deposits, wealth management and insurance. All of our employees exemplify our community mission
ery day by fostering strong relationships with businesses, individuals and municipalities 
o rely on us for their financial well-being. In 2024, we contributed $200,000 to two
nnsylvania-based breast cancer charities with proceeds from the 9th annual Mid Penn
nk Celebrity Golf Classic. Our lifetime of giving through that event now exceeds $1.2
lion. We also participated in our 9th annual NoShaveNovember partnership with Penn
ate Health’s Department of Urology and raised $340,000 for prostate cancer testing 
d research. That partnership has now raised over $1.3 million for a very worthwhile 
use. Our total giving for the year reached $2.24 million and Mid Penn employees
unteered their own time to the tune of 13,782 hours. Part of that volunteerism centered
ound the delivery of financial literacy education through our new MPB Classroom
iative. Fourteen community partners used the online MPB Financial Wellness Center 
2024. We sponsored 55 schools through the program with 190 teachers in those
hools participating. The budget calculator in the online Financial Wellness Center was 
used 10,500 times within the year and over 11,000 students increased their financial knowledge by using the tools 
and materials available. The majority of these students come from minority, underrepresented and disadvantaged
communities. We deem financial literacy to be a critically important part of an economy that works for all U.S.
residents, not just those who currently enjoy access.
THE UPCOMING 17th YEAR
As we move forward, we recognize both the challenges and the opportunities in the evolving economic environment.
With ongoing uncertainty and concern around inflation and its impact on the interest rate environment, potential 
trade wars, as well as regulatory developments and competitive dynamics, we must remain proactive, diligent and 
agile. We are confident that we have the exact leadership team on the Board and at the company to build yet
another annual strategic operating plan that will guide us in the continued enhancement of shareholder value and
community development and support. We also have full confidence in our amazing team of associates throughout 
Mid Penn that effectuates that strategic plan every day. In our time here, as we built and refocused this company
time and time again to respond to the ever-changing environment, it has been accomplished by great decisioning 
at the Board and Senior Management Team and delivered by an employee group that has been better recruited,
better educated, better motivated and better rewarded than at any peer. It always has been, and continues to be,
our secret sauce and will be again in 2025.
On behalf of the Board of Directors, the Senior Management Team and all of the associates of Mid Penn, we thank you 
for your continued trust and investment in Mid Penn throughout 2024. We look forward to making 2025 even better.
Rory G. Ritrievi
Chair, President and Chief Executive Officer
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OUR ONGOING 
COMMITMENT TO THE 
COMMUNITIES WE SERVE 
IS A REAL SOURCE OF 
PRIDE FOR ALL MID PENN 
STAKEHOLDERS.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2024
OR
o TRANS
R
ITION 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
MID PENN BANCORP, INC.
(Exac
E
t Nam
N
e of R
o
egistrant as Spe
S
cifi
i ed in its Charter)
Pennsylvania
25-1666413
(Sta
S te or Othe
t
r Jur
J
isdictio
t n of
o
Incorporatio
t n or Organizatio
t n)
(I.R
I
.S. E
S
mp
E
loye
o
r
Iden
d
tific
f atio
t n Num
N
ber)
2407 Park Drive
Harrisburg, Pennsylvania
17110
(Address of P
o
ri
P nc
i
ipal Executive Off
O ic
f es)
(
s
Zi
(
p C
i
ode
C
)e
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
Common Stock, $1.00 par value per share
MPB
The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defin
f ed in Rule 405 of the Securities Act.
Yes
o
No
x
Indicate by check mark if the registrant is not required to file
f
reports pursuant to Section 13 or Section 15(d) of the Act.
Yes
o
No
x
Indicate by check mark whether the registrant: (1) has file
f
d all reports required to be file
f
d by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for
f
such shorter period that the registrant was required to file
f
such reports), and (2) has been subj
u ect to such filing
requirements for
f
the past 90 days.
Yes
x
No
o
Indicate by check mark whether the registrant has submitted electronically every I
r
nteractive Data File required to be submitted pursuant to Rul
R e 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
f
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 defin
f ition 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
Accelerated Filer
x
Emerging Growth Company
o
Non-accelerated Filer
o
Smaller Reporting Company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
f
complying with any new
or revised fin
f ancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant has file
f
d a report on and attestation to its management’s assessment of the effe
f ctiveness of its internal
control over fin
f ancial reporting under Section 404(b) of the Sarba
r
nes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fir
f m that
prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing refle
f ct the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant's executive officers dur
d
ing the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark whether the registrant is a shell company (as defined in Rul
R e 12b-2 of the Act).
Yes
o
No
x
The aggregate market value of the registrant’s voting and non-voting common equity held by non-affi
f liates computed by reference to the closing price of
the common equity of $21.95 per share, as reported by The NASDAQ Stock Market LLC ("NASDAQ"), on June. 30, 2024, the last business day of the
registrant’s most recently completed second quarter was appr
a
oximately $389.4 million. As of Februa
r
ry 28, 2025, the registrant had 19,355,997 shares of
common stock outstanding, par value $1.00 per share.
DOCUMENTS INCORPORAT
R
ED BY REFERENCE
Portions of the defin
f itive proxy statement of the Registrant for the 2025 Annual Meeting of Shareholders are incorpor
r
ated by reference in Part III.
Auditor Firm ID: 49
Auditor Name: RSM US LLP
Auditor Location: Philadelphia, PA USA

FORM 10-K
TABLE OF CONTENTS
PAGE
PART I
Item 1 -
Business
4
Item 1A -
Risk Factors
17
Item 1B -
Unresolved Staff Comments
30
Item 1C -
Cybersecurity
31
Item 2 -
Properties
32
Item 3 -
Legal Proceedings
32
Item 4 -
Mine Safety Disclosures
32
PART II
Item 5 -
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
33
Item 6 -
[Reserved]
34
Item 7 -
Management’s Discussion and Analysis of Financial Condition and Results of Operations
35
Item 7A -
Quantitative and Qualitative Disclosures About Market Risk
58
Item 8 -
Financial Statements and Supplementary Data
60
Item 9 -
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A -
Controls and Procedures
142
Item 9B -
Other Information
142
Item 9C -
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
142
PART III
Item 10 -
Directors, Executive Officers and Corporate Governance
143
Item 11 -
Executive Compensation
143
Item 12 -
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
143
Item 13 -
Certain Relationships and Related Transactions, and Director Independence
143
Item 14 -
Principal Accounting Fees and Services
144
PART IV
Item 15 -
Exhibit and Financial Statement Schedules
144
Item 16 -
Form 10-K Summary
147
Signatures
148
EXHIBITS
MID PENN BANCORP, INC.
2

GLOSSARY OF DEFINED ACRONYMS AND TERMS
2023 Plan
2023 Stock Incentive Plan
ACL
Allowance for
f
Credit Losses
AFS
Availabl
a e for
f
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)
Bruns
r
wick
Bruns
r
wick Bancorp
r
Bruns
r
wick Acquisition
Merger acquisition of Brunswick
Bruns
r
wick Bank
Brun
r
swick Bank & Trus
r
t Company
CCL
Provision for Credit Losses - Credit Commitments
CD
Certific
f ate of Deposit
CECL
Current Expected Credit Losses as defin
f ed by FASB ASC Topic 326
DCF
Discounted Cash Flow
DIF
FDIC’s Deposit Insurance Fund
DRIP
Dividend Reinvestment Plan
FASB
Financial Accounting Standards Board
FDIC
Federal Deposit Insurance Corpor
r
ation
FHLB
Federal Home Loan Bank of Pittsburgh
FICO
Fair Isaac Corpor
r
ation credit scoring model
First Priority
First Priority Financial Corp.
FOMC
Federal Open Market Committee
FTE
Fully taxabl
a e-equivalent
GAAP
Accounting principles generally accepted in the United States of America
GDP
Gross domestic product
HFS
Held for
f
Sale
HTM
Held to Matur
t
ity
LGD
Loss Given Default
LHFI
Loans held for
f
investment
LIHTC
Low-Income Housing Tax Credits
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
Merger Agreement
Agreement and Plan of Merger between Mid Penn and William Penn.
Mid Penn or the Corporation
Mid Penn Bancorp,
r
Inc.
NASDAQ
Majo
a r stock exchange where the Corporation's shares are traded
N/M
Not meaningful
f
- (percentage changes greater than +/- 150% not considered meaningful
f )
OBS
Off-Balance Sheet
OCI
Other Comprehensive Income
PCD
Purchased Credit Deteriorated
PCL
Provision for Credit Losses - Loans
PD
Probabi
a lity of Default
Phoenix
Phoenix Bancorp Inc.
Publ
u ic Offe
f ring
Underwritten public offe
f ring of 2,375,000 shares of the Corpor
r
ation’s common stock
Riverview
Riverview Financial Corpor
r
ation
Riverview Acquisition
Merger acquisition of Riverview
ROA
Retur
t
n on Assets
ROE
Retur
t
n on Equity
SBA
Small Business Association
Scottdale
Scottdale Bank and Trus
r
t Company
SEC
Securities Exchange Commission
SOFR
Secured Overnight Financing Rate
William Penn
William Penn Bancorporation
WSJP
Wall Street Journal Prime
MID PENN BANCORP, INC.
3

PART I
ITEM 1. BUSINESS
The disclosures set for
f
th in this Item are qualifie
f d by the section captioned "Special Cautionary Notice Regarding Forward-
Looking Statements" contained in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and
Results of Operations, and other cautionary statements set for
f
th elsewhere in this report.
Mid Penn Bancorp, Inc.
Mid Penn Bancorp, Inc. is a financial holding company incorpor
r
ated in August 1991 in the Commonwealth of
Pennsylvania. Mid Penn Bancorp, Inc. and its wholly owned bank and nonbank subs
u
idiaries are collectively refer
f red to
herein as "Mid Penn" or the "Corporation." On December 31, 1991, Mid Penn acquired, as part of the holding company
formation, all of the outstanding common stock of Mid Penn Bank, referred to herein as "The Bank", and the Bank became
a wholly-owned subs
u
idiary of Mid Penn. In addition to Mid Penn Bank, Mid Penn maintains five wholly-owned nonbanks
subs
u
idiaries: MPB Financial Services, LLC, which serves as the mid-tier holding company for
f
MPB Risk Services, LLC, a
licensed insurance producer, MPB Wealth Management, LLC (which ceased operating dur
d
ing the first quarter of 2024),
and MPB Launchpad Fund I, LLC, which was for
f
med to hold certain financial holding company eligible investments; and
MPB Realty Holding, LLC, which was for
f
med for
f
purpos
r
es of holding certain assets acquired for
f
debts previously
contracted. As of December 31, 2024, the accounts and activities of these nonbank subs
u
idiaries were not material to
warrant separate disclosure or segment reporting. Mid Penn’s primary business is to supervise and coordinate the business
of the Bank and its nonbank subs
u
idiaries, and to provide them with the capital and resources to fulfill
f
their respective
missions.
Mid Penn’s consolidated financial condition and results of operations consist almost entirely of that of the Bank, which is
managed as a single business segment. At December 31, 2024, Mid Penn had total consolidated assets of $5.5 billion with
total deposits of $4.7 billion and total shareholders’ equity of $655.0 million. The holding company and its nonbank
subs
u
idiaries currently do not own or lease any real property. The Bank owns or leases the banking offi
f ces as identifie
f d in
Part I, Item 2.
Mid Penn Bank
Mid Penn Bank was organized in 1868 under a predecessor name, Millersburg Bank, and became a state-chartered bank in
1931. Millersburg Bank obtained trust powers in 1935, at which time its name was changed to Millersburg Trust Company.
In 1971, Millersburg Trust Company adopted the name "Mid Penn Bank". Mid Penn’s legal headquarters are located at
2407 Park Drive, Harrisburg, Pennsylvania 17110, and the Bank’s legal headquarters are located at 349 Union Street,
Millersburg, Pennsylvania 17061.
On March 1, 2015, in connection with the acquisition of Phoenix Bancorp, Inc. ("Phoenix") by Mid Penn, Phoenix’s
wholly-owned banking subs
u
idiary, Miners Bank, was merged with and into the Bank, with the Bank being the surviving
charter.
On January 8, 2018, Mid Penn completed its acquisition of The Scottdale Bank and Trus
r
t Company ("Scottdale") through
the merger of Scottdale with and into the Bank (the "Scottdale Merger"). The Scottdale Merger resulted in the addition of
five branches in Western Pennsylvania operating as "Scottdale Bank & Trus
r
t, a Division of Mid Penn Bank".
On July 31, 2018, Mid Penn completed its acquisition of First Priority Financial Corp.
r
pursuant to which First Priority was
merged with and into Mid Penn (the "First Priority Merger"), with Mid Penn being the surviving corporation in the First
Priority Merger. As part of this acquisition, First Priority’s banking subs
u
idiary, First Priority Bank, was merged with and
into the Bank. The First Priority Merger resulted in the addition of eight offi
f ces in Southeastern Pennsylvania.
On November 30, 2021, Mid Penn completed its acquisition of Riverview Financial Corporation, the holding company for
f
Riverview Bank, through the merger of Riverview with and into Mid Penn. In connection with the Riverview Acquisition,
i
Riverview Bank was me g
rg d
ed
i
wi hth and i
d into the Ba k
nk,
i
wi hth hthe Bank as the surviving i
g ins ititu ition. The Riverview merger
resulted in the addition of twenty-three community banking offi
f ces and three limited purpos
r
e offices across Western
Pennsylvania.
MID PENN BANCORP, INC.
4

On December 30, 2022, Mid Penn purchased the assets of Managing Partners, Inc., an independent insurance agency that
serviced the Central Pennsylvania area.
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, Bruns
r
wick Bank, a wholly-owned
subs
u
idiary of Bruns
r
wick, merged with and into Mid Penn Bank, a wholly-owned subs
u
idiary of Mid Penn. This transaction
included the acquisition of five branches and extended Mid Penn's foot
f
pr
t
int into Middlesex and Monmouth counties in
central New Jersey.
On July 31, 2024, Mid Penn acquired the insurance business and related accounts of, Commonwealth Benefits Group, a
full-service employee benefit
f s fir
f m that served 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 payabl
a e pursuant to a three year earnout.
On October 31, 2024, Mid Penn entered into an Agreement and Plan of Merger with William Penn Bancorporation
pursuant to which William Penn will merge with and into Mid Penn in an all-stock transaction valued at appr
a
oximately
$107 million, based on Mid Penn’s closing stock price as of October 30, 2024. The Merger has been approved
unanimously by each company’s board of directors and is expected to close in the first half of 2025. Completion of the
transaction is subject to customary closing conditions, including the receipt of required regulatory a
r
ppr
a
ovals and the
approval of Mid Penn and William Penn shareholders.
Under the terms of the Merger Agreement, shareholders of William Penn will have the right to receive, for
f
each share of
common stock, par value $0.01 per share, of William Penn, 0.426 shares of Mid Penn common stock (the “Exchange
Ratio”) and cash in lieu of fra
f ctional shares, subj
u ect to adjustment and proration as described in the Merger Agreement.
Additional infor
f
mation related to the recent acquisitions can be found in "Note 2 - Business Combinations", to the
Consolidated Financial Statements contained in Part II, Item of this report.
As of December 31, 2024, the Bank operates 42 ful
f l-service retail banking locations in the Pennsylvania counties of Berks,
Blair, Bucks, Chester, Clearfield, Cumberland, Dauphin, Fayette, Huntingdon, Lancaster, Lehigh, Luzerne, Montgomery,
r
Perry, Schuylkill and Westmoreland, along with 3 ful
f l-service retail banking locations in the New Jersey counties of
Middlesex and Monmouth. One new full-service retail banking location opened in Camden County, New Jersey in January
2025.
Mid Penn’s primary business consists of attracting deposits and loans from the Bank’s network of community banking
offi
f ces. The Bank engages in ful
f l-service commercial banking and trust business, making availabl
a e 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, construc
r
tion financing, farm loans, community development and local
government loans and various types of time and demand deposits. The Pennsylvania Department of Banking and Securities
and the Federal Deposit Insurance Corpor
r
ation supervise the Bank. Deposits of the Bank are insured by the FDIC’s Deposit
Insurance Fund ("DIF") to the maximum extent provided by law. In addition, the Bank provides a full range of trus
r
t and
retail investment services. The Bank also offe
f rs other services such as online banking, telephone banking, cash
management services, automated teller services and safe deposit boxes.
Business Stra
t
tegy
e
The Bank provides services to commercial businesses and real estate investors, consumers, nonprofit
f
organizations, and
municipalities through its 45 full-service retail banking properties, one loan production offi
f ce, one wealth management
offi
f ce, two corpor
r
ate administrations offi
f ces, and one operations facility, primarily based in Pennsylvania. Mid Penn’s
primary markets refle
f ct a diversified manufac
f
turing and services base across sixteen Pennsylvania counties and two
counties in New Jersey, including having several offic
f es in and around the state capital region of Harrisburg. The Bank
emphasizes developing long-term customer relationships, maintaining high quality service, and providing prompt
responses to customer needs. Mid Penn believes that local relationship building and its prude
r
nt approach to lending are
important factors in the success and growth of Mid Penn.
MID PENN BANCORP, INC.
5

Human Capital
The majority of employees of the Corpor
r
ation are employed by the Bank, with a shared services agreement to support the
operation of the holding company. As of December 31, 2024, the Bank had 591 full-time and 23 part-time employees.
Additionally, Mid Penn’s nonbank subs
u
idiaries employed 9 full-time employees and 1 part-time employee as of
December 31, 2024. The Corpor
r
ation and its employees are not subj
u ect to a collective bargaining agreement and the
Corporation believes it enjoys good relations with its employees.
Diversi
r ty & Inc
I
lusion
The Corpor
r
ation believes that a diverse and inclusive workfor
f
ce fosters an environment where everyone
r
can thrive and be
successful
f . As of December 31, 2024, approximately 65% of our workforce is fem
f
ale. Bank leadership has seen the
benefits of Employee Resource Groups ("ERG") within our organization. In 2022, Mid Penn for
f
malized committee
members on our Women’s Leadership Network, Diversity, Equality, and Inclusion ("DEI"), and our Culture Committees.
Throughout 2024, the entire organization has benefited fro
f
m the contributions of these groups. Each group a
u
llows
employees to come together based on shared characteristics to address common challenges and to drive positive impact
within the workfor
f
ce. We have found
f
that our Women’s Leadership Network has provided a sense of belonging and
camaraderie for our primarily fem
f
ale workfor
f
ce. The Women’s Leadership group h
u
as expanded its reach by creating a
subgr
u
oup called MPB Moms. This group serves as a community for mothers to connect, share like experiences and offer
suppor
u
t to each other as they balance their personal and profes
f
sional lives. Our DEI group has laid the groundwork to help
create a more diverse and inclusive workpl
k ace by promoting understanding, respect, and awareness of diffe
f rent cultures,
backgrounds, and perspectives. Our Culture Committee has foc
f
used on contributing to a positive organizational culture by
fostering open communication, collabor
a
ation, and a sense of community; this sense of community is important to Mid Penn
as we continue to expand geographically. The Cultur
t
e Committee also supports wellness initiatives by creating initiatives,
programs, and resources to encourage physical, mental, and emotional wellness. The committee aims to suppor
u
t healthy
work-life b
f
alance, understand and better utilize our benefit programs, and foster a positive, wellness-oriented workpl
k ace
culture. We have found
f
that employees who belong to any of our ERGs are more engaged, are developing leadership skills,
and are gaining new experiences through volunteer and networking opportunities.
Educ
d
ation and Developm
o
ent
We encourage and suppor
u
t the growth and development of our employees and, wherever possible, seek to fill positions by
promotion within the organization. The education and development of our employees is a priority, and we continue to
invest in tools, educ
d
ation programs, certific
f ations, and continuing educ
d
ation to help our employees build their knowledge,
skills and experience. We provide in-house training to employees on a variety of topics, including leadership and
profes
f
sional development, cybersecurity, risk, compliance, and technology.
Benefit
e
st
On an ongoing basis, we promote the health and wellness of our employees by strongly encouraging work-life b
f
alance. Our
benefits package includes health care coverage, retirement benefits
f
, life a
f
nd disabi
a lity insurance, tuition-reimbursement,
parental leave, wellness programs, and paid time off.
f
Retention
Employee retention helps us operate effi
f ciently and offers continuity to our customers and the community. We believe our
concern for
f
our employees’ well-being, suppor
u
ting our employees’ career goals, offering competitive wages, and providing
valuable benefits aids in retention of our employees.
Community Involvement
The Bank is dedicated to suppor
u
ting charitabl
a e community organizations through corporate donations, employee
volunteerism and fundraising. In 2024, our employees demonstrated their commitment to our communities by personally
giving more than $69 thousand to charitabl
a e organizations within Mid Penn’s foot
f
pr
t
int through our Dress Down Friday
program.
MID PENN BANCORP, INC.
6

Lending Activities
The Bank offers a variety of loan products to its customers, including commercial real estate loans, residential real estate
loans, commercial and industrial loans, and consumer loans. The Bank’s primary lending objectives are as fol
f lows:
•
to establish relationships with creditworthy customers who exhibit positive historical repayment trends,
stable cash flo
f ws and secondary sources of repayment fro
f
m tangible collateral;
•
to establish a diversified loan portfol
f io; and
•
to provide a satisfactory r
r
etur
t
n to Mid Penn’s shareholders by properly pricing loans to include the cost
of funds, administrative costs, bad debts, local economic conditions, competition, customer relationships,
the term of the loan, credit risk, collateral quality, and a reasonabl
a e profit margin.
Credit risk is managed through portfol
f io diversific
f ation, underwriting policies and procedur
d
es, and loan monitoring
practices. Lenders are provided with detailed underwriting policies for
f
all types of credit risks accepted by the Bank and
must obtain appr
a
opriate internal approvals for credit extensions. The Bank also maintains strict documentation
requirements and robust credit quality assurance practices in order to identify c
f
redit portfol
f io weaknesses as early as
possible, so any exposures that are discovered might be mitigated or potential losses reduc
d
ed. 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. As of December 31, 2024, the Bank’s highest concentration of credit is in commercial real estate.
Investment Activities
Mid Penn’s securities portfol
f io is a source for both liquidity and interest earnings and serves to support pledging
requirements on public funds deposits through investments in primarily higher-quality, fix
f ed-income debt securities. Mid
Penn does not have any significant non-governmental concentrations within its investment securities portfol
f io.
Mid Penn maintains both a held-to-maturity investment portfol
f io and an availabl
a e-for-sale investment portfol
f io. Both
portfol
f ios are comprised primarily of lower-risk debt securities, including U.S. Treasury a
r
nd U.S. government agencies,
mortgage-backed U.S. government agencies, investment-grade municipal securities, and corpor
r
ate bonds. The held-to-
maturity portfol
f io was established to support the Bank’s growth in public fund deposits, which may require pledging of
investment securities. The investments in the held-to-maturity portfol
f io are recorded on the balance sheet at book value
(amortized cost), while the availabl
a e-for-sale securities are recorded on the balance sheet at fair value. These debt securities
derive fair values relative to investments of the same type and credit profile with similar matur
t
ity dates. As the interest rate
environment changes, Mid Penn’s fai
f r value of securities will change. This diffe
f rence between the amortized cost and fai
f r
value of availabl
a e-for-sale investment securities, or unrealized loss, amounted to $24.3 million as of December 31, 2024.
On an afte
f r-tax basis, this unrealized loss on availabl
a e-for-sale securities resulted in a decrease to shareholders’ equity,
through the accumulated other comprehensive loss component, of $1.6 million. As of December 31, 2024, there was no
allowance for
f
credit losses on either the held-to-matur
t
ity or availabl
a e-for-sale investment portfol
f ios. The majority of the
investments are high quality United States and municipal securities that, if held to maturity, are expected to result in no
realized loss to the Bank.
Deposits and Other Sources of Funds
The Bank primarily uses deposits and, to a lesser extent, wholesale borrowings to finance lending and investment activities.
Wholesale borrowing sources include advances from the Federal Home Loan Bank of Pittsburgh, overnight borrowings
from the Bank’s other correspondent banking relationships, and advances from the Federal Reserve’s Discount Window.
All borrowings, except for
f
lines of credit with the Bank’s correspondent banks, require collateral in the form of loans or
securities. Collateral levels, therefore, limit the extent of borrowings and the availabl
a e lines of credit extended by the
Bank’s creditors. As a result, generating and retaining retail deposits remains critical to the fut
f ur
t
e fundi
f
ng and growth of
the business. Deposit growth within the banking industry h
r
as been subj
u ect to strong competition fro
f
m a variety of fin
f ancial
services companies. This competition may require financial institutions to adju
d st their product offerings and pricing to
maintain and grow deposits.
Additionally, the safety of traditional bank deposit produc
d
ts has remained an attractive option dur
d
ing periods of market
volatility. Mid Penn’s abi
a lity to attract retail funds in the fut
f ur
t
e will continue to be impacted by the public’s appetite for
f
the
safety of insured or local investments versus the returns offered by alternative choices as part of their personal investment
mix.
MID PENN BANCORP, INC.
7

Competition
The fin
f ancial services and banking business is highly competitive, and the profita
f
bi
a lity of Mid Penn depends principally
upon the Corpor
r
ation’s abi
a lity to successful
f ly compete in its market area. The Bank actively competes with other fin
f ancial
services companies for
f
deposit, loan, trus
r
t and wealth management business. Competitors include other commercial banks,
credit unions, savings banks, savings and loan associations, insurance companies, securities brokerage firms, finance
companies, mutual funds, and product/service alternatives via the Internet. Financial institutions compete primarily on the
quality of services rendered, interest rates on loans and deposits, service charges, the convenience of banking facilities,
location and hours of operation and, in the case of loans to larger commercial borrowers, relative lending limits.
Many competitors are larger than the Corporation and have significantly greater financial resources, personnel, and
locations from which to conduct business. In addition, the Bank is subject to banking regulations while certain non-banking
competitors may not be subj
u ect to similar regulations. For more information, see the "Supervision and Regulation" section
below and Item 1A, "Risk Factors".
Mid Penn has been abl
a e to compete effe
f ctively with other financial institutions by emphasizing customer-focused
relationship management and services, convenient hours, effi
f cient and friendly employees, a consultative sales approach,
local decision making, and quality products.
Supervision and Regulation
General
Financial holding companies and banks are extensively regulated under both fed
f
eral and state laws. The regulation and
supe
u
rvision of the Corporation and particularly the Bank are primarily focused on the protection of depositors, the DIF, and
the monetary system, and do not prioritize shareholder interests. Enfor
f
cement actions that may be imposed by federal and
state banking regulators include the imposition of a conservator or receiver, cease-and-desist orders and written
agreements, the termination of insurance on deposits, the imposition of civil money penalties, and removal and prohibition
orders. If a banking regulator takes any enforcement action, the value of an equity investment in Mid Penn could be
subs
u
tantially reduced or eliminated. As of December 31, 2024, the Corporation was not subj
u ect to any supervisory
r
enforcement actions.
Federal and state banking laws contain numerous provisions affe
f cting various aspects of the business and operations of
Mid Penn and the Bank. Mid Penn is subject to, among others, the regulations of the Securities and Exchange Commission
and the Board of Governors of the Federal Reserve System (the "Federal Reserve"). The Bank is subject to, among others,
the regulations of the Pennsylvania Department of Banking and Securities and the FDIC. The descriptions below of, and
references to, appl
a
icable statut
t es and regulations are not intended to be complete lists or reflective of all applicable
provisions or their effects on the Corporation. They are summaries of the more significant laws and regulations and are
qualifie
f d in their entirety by reference to the complete provisions of such statut
t es and regulations.
Holding Com
C
pany
m
Regul
e
ation
Mid Penn is a registered financial holding company subject to supe
u
rvision and regulation by the Federal Reserve. As such,
it is subj
u ect to the Bank Holding Company Act of 1956 ("BHCA") and many of the Federal Reserve’s regulations
promulgated thereunder. The Federal Reserve has broad enfor
f
cement powers over fin
f ancial and bank holding companies,
including the power to impose substantial fin
f es and civil penalties.
The BHCA requires Mid Penn to file an annual report with the Federal Reserve regarding the holding company and its
subs
u
idiary bank. The Federal Reserve also conducts examinations of the holding company. The Bank is not a member of
the Federal Reserve System; however, the Federal Reserve possesses cease-and-desist powers over fin
f ancial and bank
holding companies and their subsidiaries where actions would constitute an unsafe o
f
r unsound practice or violation of law.
The Federal Reserve also makes policy that appl
a
ies to the declaration and distribution of dividends by financial and bank
holding companies.
The BHCA restricts a fin
f ancial or bank holding company’s abi
a lity to acquire control of additional banks. In addition, the
BHCA restricts the activities in which financial or bank holding companies may engage directly or through nonbank
subs
u
idiaries.
MID PENN BANCORP, INC.
8

Gramm-Leach-Bliley Financial Mode
M
rnization Act
Under the Gramm-Leach-Bliley Financial Modernization Act ("GLB"), bank holding companies that meet certain
management, capital, and Community Reinvestment Act standards, are permitted to elect to become financial holding
companies. No prior regulatory a
r
ppr
a
oval will be required for
f
a fin
f ancial holding company to acquire a company, other than
a bank or savings association, engaged in certain financial activities permitted under GLB. Activities cited by GLB as
being fin
f ancial in nature include:
•
securities underwriting, dealing and market making;
•
sponsoring mutua
t
l funds
f
and investment companies;
•
insurance underwriting and agency;
•
merchant banking activities; and
•
activities that the Federal Reserve has determined by regulation to be closely related to banking.
In addition to permitting financial holding companies’ entry i
r
nto new lines of business, the law allows companies the
freedom to streamline existing operations and to potentially reduce costs. The GLB may increase both opportunity and
competition.
In December 2019, Mid Penn made the election to be treated as a fin
f ancial holding company as its subs
u
idiary bank was
well capitalized under the FDIC Improvement Act’s prompt corrective action provisions, the holding company and Bank
were deemed by the regulators to be well managed, and the Bank had at least a satisfactory r
r
ating under the Community
Reinvestment Act. The required filin
f
g supporting this election was a declaration that the bank holding company wished to
become a fin
f ancial holding company and met all applicable requirements. Mid Penn made the election given the
Corporation’s growth and the intended broadening spectrum of fin
f ancial product and service offerings to potentially
include, but not be limited to, insurance and wealth management services.
Bank Regul
e
ation
As a Pennsylvania-chartered, non-member bank, the Bank is subject to supe
u
rvision, regulation, and examination by both
the Pennsylvania Department of Banking and Securities and the FDIC. The deposits of the Bank are insured by the FDIC to
the maximum extent provided by law. The FDIC assesses deposit insurance premiums, the amount of which depends in
part on both the asset size and the condition of the Bank. Moreover, the FDIC may terminate deposit insurance of the Bank
under certain circumstances. The fed
f
eral and state banking regulatory a
r
gencies have broad enforcement powers over
depository institut
t ions under their jurisdiction, including the power to terminate deposit insurance, to impose fin
f es and
other civil and criminal penalties, and to appoi
a
nt a conservator or receiver if any of a number of conditions is met. In
addition, the Bank is subject to a variety of local, state, and federal laws that affect its operations.
Banking regulations affe
f ct a wide range of the Bank’s activities and operations, including, but not limited to, permissible
types and amounts of loans, investments and other activities, capital adequacy, branching, interest rates on loans,
compensation standards, payment of dividends, various bank account and bank service disclosures, and the safety and
soundness of banking practices.
Capi
a tal Requirements,
t
Prompt
m
Corrective Action and Basel III
I
Capi
a tal Refor
f
ms
Under risk-based capital requirements for
f
financial or bank holding companies, Mid Penn is required to maintain a
minimum ratio of total capital to risk-weighted assets (including certain off-b
f
alance-sheet activities, such as standby letters
of credit) of 10.5%. At least half of the total capital is to be composed of common equity, retained earnings and qualifyi
f ng
perpetua
t
l preferred stock, less goodwill ("Tier 1 Capital"). The remainder may consist of subordinated debt, non-qualifyi
f ng
prefer
f red stock, and a limited amount of the loan loss allowance ("Tier 2 Capi
a tal"). Combined, the Tier 1 Capital and Tier 2
Capi
a tal comprise regulatory "
r
Total Capital". As of December 31, 2024, Mid Penn complied with these risk-based capital
requirements.
In addition, the Federal Reserve has establ
a ished minimum leverage ratio requirements for
f
bank holding companies. These
requirements provide for a minimum leverage ratio of Tier 1 Capital to adjusted average quarterly assets ("leverage ratio")
equal to 3% for
f
bank holding companies that meet certain specified criteria, including having the highest regulatory r
r
ating.
All other bank holding companies will generally be required to maintain a leverage ratio of at least 4-5%. The requirements
also provide that bank holding companies experiencing internal growth or making acquisitions will be expected to maintain
strong capital positions subs
u
tantially above the minimum supervisory l
r
evels without significant reliance on intangible
assets. Furthermore, the requirements indicate that the Federal Reserve will continue to consider a "Tangible Tier 1
MID PENN BANCORP, INC.
9

Leverage Ratio" (deducting all intangibles) in evaluating proposals for
f
expansion or new activity. As of December 31,
2024, Mid Penn has met these leverage requirements, and the Federal Reserve has not advised Mid Penn of any specific
minimum Tier 1 leverage ratio requirement.
The Bank is subject to similar capital requirements adopted by the FDIC, and as of December 31, 2024, the Bank’s capital
levels were sufficient to be considered "well-capitalized". The FDIC has not advised the Bank of any specific minimum
leverage ratios.
The capital ratios of Mid Penn and the Bank are described in "Note 17 - Regulatory M
r
atters", within Item 8, Notes to
Consolidated Financial Statements, which are included herein.
Banking regulators may further refin
f e capital requirements app
a
licable to banking organizations, including those discussed
in the "Regulatory C
r
apital Changes" section below. Changes to capital requirements could materially affe
f ct the profitabi
a lity
of Mid Penn or the fair value of Mid Penn stock.
In addition to the required minimum capital levels described above, fed
f
eral law establishes a system of "prompt corrective
actions" which federal banking agencies are required to take, and certain actions which they have discretion to take, based
upon the capital category i
r
nto which a fed
f
erally regulated depository institution fal
f ls. Regulations set for
f
th detailed
procedur
d
es and criteria for
f
implementing prompt corrective action in the case of any institution that is not adequately
capitalized. Under the rules, an institution will be deemed to be "adequately capitalized" if it exceeds the minimum federal
regulatory c
r
apital requirements. However, it will be deemed "undercapitalized" if it fai
f ls to meet the minimum capital
requirements, "significantly undercapitalized" if it has a Total Risk-Based Capi
a tal ratio that is less than 6%, a Tier 1 Risk-
Based Capital ratio that is less than 3%, or a leverage ratio that is less than 3%, and "critically undercapitalized" if the
institution has a ratio of tangible equity to total assets that is equal to or less than 2%.
The prompt corrective action rul
r es require an undercapitalized institution to file
f
a written capital restoration plan, along
with a performance guaranty by its holding company or a third party. In addition, an undercapitalized institution becomes
subj
u ect to certain automatic restrictions including a prohibition on payment of dividends, a limitation on asset growth and
expansion, in certain cases, a limitation on the payment of bonuses or raises to senior executive officers, and a prohibition
on the payment of certain "management fees" to any "controlling person". Institutions that are classified as undercapitalized
are also subject to certain additional supervisory a
r
ctions, including increased reporting burdens and regulatory m
r
onitoring,
a limitation on the institut
t ion’s abi
a lity to make acquisitions, open new branch offi
f ces, or engage in new lines of business,
obligations to raise additional capital, restrictions on transactions with affi
f liates, and restrictions on interest rates paid by
the institution on deposits. In certain cases, bank regulatory a
r
gencies may require replacement of senior executive offi
f cers
or directors, or sale of the institution to a willing purchaser. If an institution is deemed "critically undercapitalized" and
continues in that category f
r
or
f
four quarters, the statute requires, with certain limited exceptions, that the institution be
placed in receivership.
Mid Penn and the Bank are subj
u ect to the Basel III Rules that are based upon
u
the fin
f al framework of the Basel Committee
for strengthening capital and liquidity regulation. Under the Basel III Rules, Mid Penn and the Bank appl
a
y the standardized
approach in measuring risk weighted assets ("RWA") and regulatory c
r
apital.
Under the Basel III Rules, Mid Penn and the Bank are subj
u ect to the fol
f lowing minimum capital ratios:
•
Common equity tier 1 capi
a tal ("CET1") to risk-weighted assets of 4.5%
•
Tier 1 capi
a tal to RWA of 6.0%
•
Total capital to RWA of 8.0%
•
Leverage ratio of 4.0%
The Basel III Rules also included a "capital conservation buffe
f r" of 2.5%, composed entirely of CET1, in addition to the
minimum capital to RWA ratios outlined above, resulting in effe
f ctive minimum common equity tier 1, Tier 1 and total
capital ratios of 7.0%, 8.5% and 10.5%, respectively. The capital conservation buffe
f r is designed to abs
a
orb l
r
osses dur
d
ing
periods of economic stress. Banking institutions with a capital ratio above the minimum, but below the conservation buffe
f r,
will face restrictions on dividends, equity repurchases, and executive compensation based on the amount of the shortfal
f l
and the institution's "eligible retained income" (that is, four
f
quarter trailing net income, net of distributions and tax effe
f cts
not reflected in net income). As of December 31, 2024, the Corpor
r
ation and the Bank exceeded the minimum capital
requirements, including the capital conservation buffe
f r, as prescribed in the Basel III Rules.
MID PENN BANCORP, INC.
10

The Basel III Rules provide for a number of required deduc
d
tions from and adju
d stments to CET1. These deductions and
adju
d stments include, for
f
example, goodwill, other intangible assets, and deferred tax assets ("DTAs") that arise from
f
net
operating loss and tax credit carryforwards net of any related valuation allowance. DTAs arising fro
f
m temporary
r
differences that could not be realized through net operating loss carrybacks and investments in non-consolidated financial
institutions must also be deducted fro
f
m CET1 to the extent that they exceed certain thresholds. Through subs
u
equent
rulemaking, the fed
f
eral banking agencies provided certain forms of relief to banking organizations, such as Mid Penn and
the Bank, that are not subj
u ect to the advanced approaches framework. Mid Penn and the Bank made a one-time, permanent
election under the Basel III Rules to exclude the effects of certain components of accumulated ("AOCI") included in
shareholders' equity under generally accepted accounting principles in the United States ("GAAP") in determining
regulatory c
r
apital ratios.
Under the Basel III Rules, certain off-b
f
alance sheet commitments and obligations are converted into RWA, that together
with on-balance sheet assets, are the base against which regulatory c
r
apital is measured. The Basel III Rules defin
f ed the
risk-weighting categories for
f
bank holding companies and banks that follow the standardized approach, such as Mid Penn
and the Bank, based on a risk-sensitive analysis, depending on the natur
t
e of the exposure.
The Capital Simplific
f ations Rules eliminated the standalone prior appr
a
oval requirement in the Basel III Rules for
f
any
repurchase of common stock. In certain circumstances, repurchases of our common stock may be subject to a prior
approval or notice requirement under other regulations or policies of the Federal Reserve. Any redemption or repurchase of
prefer
f red stock or subor
u
dinated debt remains subj
u ect to the prior appr
a
oval of the Federal Reserve.
Safet
f y a
t
nd Soundness Standards
The fed
f
eral banking regulatory a
r
gencies have adopted a set of guidelines prescribing safet
f y and soundness standards for
f
depository institutions such as the Bank. The guidelines establ
a ish general standards relating to management practices,
internal controls and infor
f
mation systems, internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, asset quality, liquidity, capital, earnings, compensation, fees, and benefits. In general, the
guidelines require, among other things, appr
a
opriate systems and practices to identify a
f
nd manage the risks and exposures
specified in the guidelines. The guidelines prohibit excessive compensation as an unsafe a
f
nd unsound practice and describe
compensation as excessive when the amounts paid are unreasonabl
a e or disproportionate to the services perform
f
ed by an
executive officer, employee, director, or principal shareholder.
In addition, the agencies adopted regulations that authorize an agency to order an institution that has been given notice by
an agency that it is not satisfyi
f ng any of such safet
f y and soundness standards to submit a compliance plan. If an institution
is not satisfying certain safety and soundness standards and fails to submit to the banking regulatory a
r
gency an acceptabl
a e
compliance plan or fai
f ls to implement an accepted plan, the agency may issue an order directing action to correct the
deficiency and may issue an order directing other actions be taken, including restricting asset growth, restricting interest
rates paid on deposits, restricting dividend payments to shareholders, and requiring an increase in the institution’s ratio of
tangible equity to assets. For the periods reported in this Form 10-K and in the period subsequent to December 31, 2024, up
u
to the date of the filing of this Form 10-K, Mid Penn was not subj
u ect to any such bank regulatory o
r
rders.
Commercial Real Est
E ate Guidance
Federal agencies released additional guidance in July 2023, in response to the increased commercial real estate ("CRE")
concentrations that have occurred in recent years. The guidance identifie
f s institutions that are potentially exposed to
significant CRE concentration risk as those who have experienced rapi
a d growth in CRE lending, have notable exposures to
a specific type of CRE, or are appr
a
oaching, or exceed the fol
f lowing supe
u
rvisory c
r
riteria:
•
Total loans reported on the Report of Condition for construc
r
tion, land development, and other land represent 100
percent or more of the institut
t ion’s total capi
a tal; or
•
Total CRE loans as defined in the CRE guidance represent 300 percent or more of the institution’s total capi
a tal,
and the outstanding balance of the institut
t ion’s CRE loan portfol
f io has increased by 50 percent or more dur
d
ing the
prior 36 months.
MID PENN BANCORP, INC.
11

If the Bank's portfol
f io exceeds the guidelines mentioned above
a
, additional risk management practices may be needed. In
the analysis of the CRE portfol
f io, the consideration of the following factors could mitigate the risk posed by the
concentration:
•
Portfol
f io diversific
f ation across property types;
•
Geographic dispersion of CRE loans;
•
Underwriting standards;
•
Level of pre-sold units or other types of take-out commitments on construc
r
tion loans; and
•
Portfol
f io liquidity.
Banks that have experienced significant growth in their CRE lending will receive closer regulatory r
r
eview than those that
have not.
Mid Penn's underwriting process for
f
commercial real estate loans includes analysis of the financial position and strength of
both the borrower and, if applicable, guarantor, experience with similar proje
o cts in the past, market demand and prospects
for successful
f
completion of the proposed project within the established budget and schedule, values of underlying
collateral, availabi
a lity of permanent fin
f ancing, maximum loan-to-value ratios, minimum equity requirements, acceptabl
a e
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
u
analytical tools that consider historical and proje
o cted cash flo
f ws and performance, in addition to analysis of the
proposed project for
f
income-producing properties. Additional support offered by guarantors is also considered when
applicable.
Commercial real estate loans increased 9.2% from December 31, 2023 to December 31, 2024. Commercial real estate loans
were the largest driver of the $190.3 million growth in the total loan portfol
f io. Non-owner occupi
u ed commercial real estate
loan exposure represents 28.2% of total loan balances and is primarily limited to suburba
r
n offices.
Paym
a
ent of D
o
ividen
d
ds and Othe
t
r Restrictions
Mid Penn’s holding company is a legal entity separate and distinct from its wholly-owned Bank subs
u
idiary. There are
various legal and regulatory l
r
imitations on the extent to which the Bank can, among other things, fin
f ance, or otherwise
suppl
u
y funds
f
to the holding company. Specific
f ally, dividends from the Bank are the principal source of the holding
company’s cash funds
f
, and there are certain legal restrictions under Pennsylvania law and Pennsylvania banking
regulations on the payment of dividends by state-chartered banks. The relevant regulatory a
r
gencies also have authority to
prohibit Mid Penn and the Bank from engaging in what, in the opinion of such regulatory b
r
ody, constitutes an unsafe o
f
r
unsound banking practice. Depending upon the fin
f ancial condition of the holding company and the Bank, the payment of
dividends could be deemed by a regulatory a
r
gency to constitut
t e such an unsafe o
f
r unsound practice. The holding company
and the Bank were not subj
u ect to any such dividend prohibitions during the years ended December 31, 2024, 2023, and
2022.
Depos
e
it Insurance
The FDIC insures deposits of the Bank through the DIF. The FDIC maintains the DIF by assessing depository institutions
an insurance premium. The amount each institution is assessed is based upon a variety of factors that include the level of
assets and tangible equity, and the condition of the Bank (the degree of risk the institution poses to the insurance fund). The
FDIC insures deposits up t
u
o $250,000. The Bank pays an insurance premium into the DIF based on a regulatory d
r
efin
f ed
assessment calculation. The FDIC uses a risk-based premium system that assesses higher rates on those institut
t ions that
pose greater risks to the DIF. The FDIC places each institution in one of four risk categories using a two-step process based
first on capital ratios (the capital group assignment) and then on other relevant information (the supervisory group
assignment). Subsequently, the rate for each institut
t ion within a risk category m
r
ay be adju
d sted depending upon different
factors that either enhance or reduc
d
e the risk the institution poses to the DIF, including the unsecured debt, secured
liabi
a lities and brokered deposits related to each institut
t ion. Finally, certain risk multipliers may be appl
a
ied to the adju
d sted
assessment.
Beginning with the second quarter of 2011 and as appl
a
icable continuously through to the current period, as mandated by
the Dodd-Frank Act, the assessment base that the FDIC uses to calculate assessment premiums is the Bank’s average assets
minus average tangible equity. As the asset base of the banking industry i
r
s larger than the deposit base, the range of
assessment rates is a low of 2.5 bp and a high of 45 bp, per $100 of assets.
MID PENN BANCORP, INC.
12

The FDIC was required under the Dodd-Frank Act to establ
a ish assessment rates that allowed the DIF to achieve a reserve
ratio of 1.35% of Insurance Fund insured deposits by September 2020. In addition, the FDIC has establ
a ished a long term
goal of a "designated reserve ratio" of 2%, a target ratio that, until it is achieved, will not likely result in the FDIC reducing
assessment rates.
The reserve ratio is currently below the minimum and in October 2022, the FDIC adopted a fin
f al rule to increase initial
base deposit insurance assessment rates uniformly by 2 basis points with the intention of reaching the statut
t ory m
r
inimum
by September 30, 2028. These new rates will remain in effe
f ct until the reserve ratio meets or exceeds 2%.
Consumer Protection Laws
w
A number of laws govern the relationship between the Bank and its customers. For example, the Community Reinvestment
Act is designed to encourage services, investments, and lending activities in low- and moderate-income areas. Federal
Bank regulatory a
r
gencies passed a final rul
r e in August 2023 to strengthen and modernize the regulations to better achieve
the purpos
r
es of the law. These changes will begin to take effec
f
t on January 1, 2026.
The Home Mortgage Disclosure Act and the Equal Credit Opportunity Act attempt to minimize lending decisions based on
impermissible criteria, such as race or gender. The Truth-in-Lending Act and the Truth-in-Savings Act require banks to
provide certain disclosure of relevant terms related to loans and savings accounts, respectively. Anti-tying restrictions
(which prohibit conditioning the availabi
a lity or terms of credit on the purchase of another banking product) further restrict
the Bank’s relationships with its customers. The Bank maintains a comprehensive compliance management program to
promote its compliance with these and other applicable consumer protection laws and regulations.
Privacy L
c
aws
w
The fed
f
eral banking regulators have issued a number of regulations governing the privacy of consumer financial and
customer information. The regulations limit the disclosure by fin
f ancial institutions, such as the Corporation and Bank, of
nonpublic personal infor
f
mation about individuals who obtain fin
f ancial products or services for personal, family, or
household purpos
r
es. Subje
b ct to certain exceptions allowed by law, the regulations cover infor
f
mation sharing between
financial institutions and nonaffiliated third parties. More specific
f ally, the regulations require financial institut
t ions to
provide:
•
initial notices to customers about
a
their privacy policies, describing the conditions under which they may
disclose nonpublic personal fin
f ancial information to nonaffiliated third parties and affi
f liates;
•
annual notices of their privacy policies to their current customers; and
•
a reasonabl
a e method for consumers to "opt out" of disclosures to nonaffiliated third parties.
Affilia
f
te Transactions
Transactions between the Bank and the Corpor
r
ation, and/or its nonbank subs
u
idiary affi
f liates are governed by Sections 23A
and 23B of the Federal Reserve Act. An "affi
f liate" of a bank or savings institution is any company or entity that controls, is
controlled by, or is under common control with the bank or savings institution. Generally, a subs
u
idiary of a depository
r
institution that is not also a depository institution is not treated as an affi
f liate of the bank for
f
purpos
r
es of Sections 23A and
23B. Sections 23A and 23B are intended to protect insured depository institutions from suffe
f ring losses arising from
transactions with non-insured affiliates, by limiting the extent to which a bank or its subs
u
idiaries may engage in covered
transactions with any one affi
f liate and with all affil
f iates of the bank in the aggregate, and requiring that such transactions
be on terms that are consistent with safe and sound banking practices.
The USA
U
Patriot Act, A
t
nti-Money L
e
aundering and Anti-Terrorism
i
Financing
The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001 ("USA Patriot Act") broadened the appl
a
ication of anti-money laundering regulations to apply to additional types of
financial institutions, such as broker-dealers, and strengthened the ability of the U.S. government to detect and prosecute
international money laundering and the financing of terrorism. Under Title III of the USA Patriot Act, also known as the
International Money Laundering Abatement and Anti-Terrorism Financing Act of 2001, all fin
f ancial institutions, including
Mid Penn and the Bank, are required in general to identify t
f
heir customers, adopt formal and comprehensive anti-money
laundering programs, scrutinize or prohibit altogether certain transactions of special concern, and be prepared to respond to
MID PENN BANCORP, INC.
13

inquiries from U.S. law enforcement agencies concerning their customers and their transactions. The principal provisions
of Title III of the USA Patriot Act require that regulated financial institutions, including state-chartered banks:
•
establish an anti-money laundering program that includes training and audit components;
•
comply with regulations regarding the verification of the identity of any person seeking to open an
account;
•
take additional required precautions with non-U.S. owned accounts; and
•
perform certain verification and certific
f ation of money laundering risk for their foreign correspondent
banking relationships.
Additional infor
f
mation sharing among financial institutions, regulators, and law enforcement authorities is encouraged for
financial institutions that comply with this provision and the authorization of the Secretary o
r
f the Treasury t
r
o adopt rules to
further encourage cooperation and information-sharing.
The USA Patriot Act also expanded the conditions under which funds in a U.S. interba
r
nk account may be subject to
forfeiture and increased the penalties for
f
violation of anti-money laundering regulations. Failure of a fin
f ancial institution to
comply with the USA Patriot Act’s requirements could have serious legal and reputational consequences for the institut
t ion.
The effectiveness of a financial institution in combating money-laundering activities is a factor to be considered in any
application submitted by the financial institution under the Bank Merger Act, which appl
a
ies to the Bank.
The Bank has adopted policies, procedur
d
es, and controls to address compliance with the requirements of the USA Patriot
Act under the existing regulations and will continue to revise and upda
u
te its policies, procedur
d
es and controls to reflect
changes required by the USA Patriot Act and implementing regulations.
JOBS
O
Act
In 2012, the Jumpstart Our Business Startups
t
Act (the "JOBS Act") became law. The JOBS Act is aimed at fac
f
ilitating
capital raising by smaller companies, banks, and bank holding companies. Certain changes implemented by the JOBS Act
that impacted Mid Penn included (i) raising the threshold requiring registration under the Securities Exchange Act of 1934
(the "Exchange Act") for
f
banks and bank holdings companies fro
f
m 500 to 2,000 holders of record, and (ii) raising the
threshold for
f
triggering deregistration under the Exchange Act for
f
banks and bank holding companies fro
f
m 300 to 1,200
holders of record.
Dodd-Frank Act
The Dodd-Frank Act, which became law in July 2010, significantly changed regulation of fin
f ancial institutions and the
financial services industry.
r
Dodd-Frank created a Financial Services Oversight Council to identify e
f
merging systemic risks
and improve interagency cooperation, and centralized responsibility for consumer financial protection by creating a new
agency, the Consumer Financial Protection Bureau, which is responsible for implementing, examining, and enforc
f
ing
compliance with federal consumer financial laws. Dodd-Frank also permanently raised the current standard maximum
deposit insurance amount to $250,000, establ
a ished strengthened capital standards for
f
banks, disallowed certain trus
r
t
prefer
f red securities from qualifyi
f ng as Tier 1 Capital (subj
u ect to certain grandfat
f her provisions for existing trust prefer
f red
securities), established new minimum mortgage underwriting standards, granted the Federal Reserve the power to regulate
debit card interchange fees, and implemented corporate governance changes.
Effe
f cts o
t
f G
o
overnment Policy a
c
nd Potential Change
C
s in Regulation
Changes in regulations applicable to the Corpor
r
ation, the Bank, or its nonbank subs
u
idiaries, or shifts in monetary or other
government policies, could have a material effect on our business. The Corpor
r
ation’s business is also affected by the state
of the fin
f ancial services industry i
r
n general. As a result of legal, economic, and competitive changes, management believes
that the Corpor
r
ation and the fin
f ancial services industry w
r
ill continue to experience an increased rate of change from both
the opportunities and competitive challenges resulting from greater product and service offerings, technological
advancements, and business combinations.
From time to time, legislation is enacted that has the effe
f ct of increasing the compliance and operations requirements and
the cost of doing business, changing the tax structur
t
e appl
a
icable to Mid Penn, limiting or expanding permissible activities,
or affe
f cting the competitive balance between banks and other financial institutions. Proposals to change the laws and
regulations governing the operations and taxation of banks, bank holding companies and other fin
f ancial institut
t ions are
MID PENN BANCORP, INC.
14

frequently made in Congress and the various bank regulatory a
r
gencies. Mid Penn cannot predict the likelihood of any
majo
a r changes or the impact such changes might have on Mid Penn, the Bank, or the nonbank subs
u
idiaries. Congressional
bills and other proposals could result in additional significant changes to the financial services and banking system,
including, but not limited to, provisions for limitations on deposit insurance coverage, changing the timing and method
financial institut
t ions use to pay for deposit insurance, expanding the power of banks by removing the restrictions on bank
underwriting activities, changing the regulation of bank derivatives activities, and allowing commercial enterpri
r
ses to own
banks. As a consequence of the extensive regulation of commercial banking activities in the United States, the Bank’s
business is particularly susceptible to being affected by federal legislation and regulations that may increase the costs of
doing business or change the Corpor
r
ation’s competitive landscape
a
. Whether any fut
f ur
t
e legislation will be enacted, or
additional regulations will be adopted, and how they might impact Mid Penn, cannot be determined at this time.
Mid Penn’s earnings are, and will be affe
f cted by, domestic economic conditions and the monetary and fis
f cal policies of the
United States government and its agencies. The monetary policies of the Federal Reserve have had, and will likely continue
to have, an impact on the operating results of commercial banks because of the Federal Reserve’s power to implement
national monetary p
r
olicy to, among other things, promote employment, control infla
f tion or combat recession. The Federal
Reserve has a major impact on the loan and deposit rates offered by the Bank and its competitors, and on the levels of bank
loans, investments and deposits, through its open market operations in United States government securities and through its
regulation of, among other things, the discount rate on borrowings of member banks and the reserve requirements against
member bank deposits. It is not possible to reasonabl
a y predict the natur
t
e, amount, fre
f quency, and impact of futur
t
e changes
in monetary and fis
f cal policies.
Environmental Laws
w
Management does not anticipate that compliance with environmental laws and regulations will have any material effect on
Mid Penn’s capital, expenditures, earnings, or competitive position. However, environmentally-related hazards have
become a source of high risk and liabi
a lity for some fin
f ancial institutions.
Additionally, the Pennsylvania Economic Development Agency, Fiduciary and Lender Environmental Liabi
a lity Protection
Act provides, among other things, protection to lenders from environmental liabi
a lity and remediation costs under the
environmental laws for
f
releases and contamination caused by others. A lender who engages in activities involved in the
routine practices of commercial lending, including, but not limited to, the providing of financial services, holding of
security interests, workout practices, for
f
eclosure or the recovery of funds from the sale of property shall not be liabl
a e under
the environmental acts or common law equivalents to the Pennsylvania Department of Environmental Resources or to any
other person by virtue of the fact that the lender engages in such commercial lending practice. A lender, however, will be
liabl
a e if it, its employees or agents, directly cause an immediate release or directly exacerba
r
te a release of a regulated
subs
u
tance on or fro
f
m the property, or knew and willful
f ly compelled the borrower to commit an action which caused such
release or to violate an environmental act. The Pennsylvania Economic Development Agency, Fiduciary and Lender
Environmental Liabi
a lity Protection Act does not limit fed
f
eral liabi
a lity, which still exists under certain circumstances.
Corporate Governance
The Sarba
r
nes-Oxley Act of 2002 ("SOX") and related rul
r es and regulations adopted by the SEC and NASDAQ addressed
the fol
f lowing issues: corpor
r
ate governance, auditor independence and accounting standards, executive compensation,
insider loans, whistleblower protection, and enhanced and timely disclosure of corpor
r
ate infor
f
mation. Mid Penn has
establ
a ished policies, procedur
d
es, and systems designed to promote compliance with these regulations. Section 404 of SOX
requires publicly held companies to document, test and certify t
f
hat their internal control systems over fin
f ancial reporting
are effect
f
ive. Effe
f ctive for
f
year-end financial reports beginning with December 31, 2017, Mid Penn is subject to the
independent attestation requirement under Section 404 of the SOX. The Bank remains subj
u ect to independent auditor
attestation under FDIC regulation 363.3(b), which is a similar independent attestation requirement at the Bank level.
Available Infor
f
mation
Mid Penn’s common stock is registered under Section 12(b) of the Exchange Act and is traded on NASDAQ under the
trading symbol MPB. Mid Penn is subject to the infor
f
mational requirements of the Exchange Act, and, accordingly, files
reports, proxy statements and other information with the SEC. Mid Penn is an electronic file
f
r with the SEC. The SEC
maintains an Internet site that contains reports, proxy and infor
f
mation statements, and other information regarding issuers
that file electronically with the SEC. The SEC’s Internet site address is www.sec.gov.
MID PENN BANCORP, INC.
15

Mid Penn’s headquarters are located at 2407 Park Drive, Harrisburg, Pennsylvania 17110, and its telephone number is
1-866-642-7736. Mid Penn’s website is midpennbank.com
p
and Mid Penn makes available through its website, free of
charge, its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to
those reports as soon as reasonabl
a y possible after filing with the SEC. Mid Penn has adopted a Code of Ethics that applies
to all employees and this document is also available on Mid Penn’s website. The information included on our website is not
considered a part of this document.
MID PENN BANCORP, INC.
16

ITEM 1A. RISK FACTORS
Before investing in Mid Penn common stock, an investor should careful
f ly read and consider the risk fact
f
ors described
below, which are not intended to be all inclusive, and to review other information contained in this report and in our other
filings with the SEC. We are subj
u ect to a number of risks potentially impacting our business, financial condition, results of
operations and cash flo
f ws. As a financial services company, certain elements of risk are inherent in what we do and the
business decisions we make. Thus, we encounter risk as part of the normal course of our business, and we design risk
management processes to help manage these risks. The risks and uncertainties described below are not the only ones faci
f
ng
Mid Penn’s holding company, the Bank, and nonbank subs
u
idiaries. Some of these risks and uncertainties are interrelated
and the occurrence of one or more of them may exacerbate the effe
f ct of others. Additional risks and uncertainties that we
are not aware of, or that we currently deem less significant, or that we are otherwise not specifically focused on, may also
impact our business, results of operations, and our common stock. If any of these known or unknown risks or uncertainties
actua
t
lly occurs, our business, financial condition and results of operations could be materially and adversely affec
f
ted. If
this were to happe
a
n, the market price of our common stock could decline significantly, and an investor could lose all or part
of his or her investment in Mid Penn.
Unless the context otherwise requires, references to "we," "us", "our," "Mid Penn", or "Mid Penn Bancorp, Inc.,"
collectively refer
f
to Mid Penn Bancorp, Inc. and its subsidiaries, and specific refer
f ences to the "Bank" refer to Mid Penn
Bank, the wholly owned banking subs
u
idiary of Mid Penn Bancorp, Inc.
Risks Related to Our Primary Business and Industry
Mid Penn is s
i
ubject to interest rate risk
i
.k
Mid Penn’s earnings and cash flo
f ws are largely dependent upon the Bank’s net interest income. Net interest income is the
difference between interest income earned on interest-earning assets such as loans and securities, and interest expense paid
on interest-bearing liabi
a lities such as deposits and borrowed fun
f
ds. Interest rates are highly sensitive to many fac
f
tors that
are beyond Mid Penn’s control, including general economic conditions and policies of various governmental and
regulatory a
r
gencies and, in particular, the Board of Governors of the Federal Reserve System (the "Federal Reserve").
Changes in monetary policy, including changes in interest rates, could influ
f ence not only the interest income the Bank
receives on loans and securities and the amount of interest expense it pays on deposits and borrowings, but such changes
could also affect (i) the Bank’s abi
a lity to originate loans and obtain deposits, (ii) the fai
f r value of financial assets and
liabi
a lities, and (iii) the average duration of mortgage-backed securities in the Bank’s investment portfol
f io. If the interest
rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other
investments, Mid Penn’s net interest income, and therefor
f
e earnings, could be adversely affected. Earnings could also be
adversely affected if the interest rates received on loans and investments fal
f l more quickly than the interest rates paid on
deposits and borrowings.
i
Mid Penn m y
ay be subjbj
u ect to a greater iri k
sk of iri isi g
ng interest rate d
s due
d
to hthe current pe iri d
od of
iri isi g
ng interest rates a d
nd hihigh
gh inflflation. In 2024, hthe F d
eder lal Reserve cut interest rates three itime i
s in response to c
l
ooling
inflflation a d
nd a weake ini g
ng labor
a
ma k
rket, after raising i
g interest rates in 2023 and 2022 to cu b
rb inflflation,
h
which was expect d
ed
to driv
d
e down the prices of income or didi ivide d
nd-payiyi g
ng secu iri ities.
h
The risk tha i
t interest rates may rem iain v lolatilil
i
e is
pronounc d
ed.
Management believes it has implemented effe
f ctive asset and liabi
a lity management strategies and interest rate risk
management activities to reduce the potential effec
f
ts of changes in interest rates on Mid Penn’s results of operations. Any
subs
u
tantial, unexpected, prolonged, or rapi
a d change in market interest rates could have a material adverse effec
f
t on the
Bank’s net interest income and Mid Penn’s fin
f ancial condition and results of operations.
Mid Penn is s
i
ubject to credit risk
i
.k
As of December 31, 2024, appr
a
oximately 82% of the Bank’s loan portfol
f io consisted of commercial real estate, commercial
and industrial, and construc
r
tion loans. These types of loans are generally viewed as having more risk of default than
residential real estate loans or secured consumer loans. Commercial loans are also typically larger than residential real
estate loans and consumer loans. Because the loan portfol
f io contains a significant number of commercial and industrial
loans, and construction and commercial real estate loans with relatively large balances, the deterioration of one or a few
f
of
these loans could cause a significant increase in non-performing loans. In addition, Mid Penn’s credit risk may be
exacerba
r
ted when the collateral held by Mid Penn cannot be readily realized or liquidated at prices sufficient to recover the
full amount of the credit or derivative exposure due
d
to Mid Penn. An increase in non-performing loans or collateral value
deficiencies could result in a net loss of earnings from these loans, an increase in the provision for credit losses on loans
MID PENN BANCORP, INC.
17

and an increase in loan charge-offs
f , all of which could have a material adverse effect on Mid Penn’s fin
f ancial condition and
results of operations.
The allowance for
f
credit losses may not be suff
u ic
f ient to cover actual loan losses.
Following hth i
e issuance by
by hthe Finan ici lal Accounting Sta d
nda d
rds Boa d
rd (“FASB )”) of Accounting Sta d
nda d
rds U d
pdate (“ASU”)
2016-13, “Measurement of Cr d
edit Losses on Finan ici lal Instruments,” effective Janua y
ry 1, 2023,
i
Mid Penn adjdjusted i
d its loan
lallowance meth d l
hodol gy
ogy to reflflect the new sta d
nda d
rd, whihi h
ch re
i
quires periodidic estimates of l
f lififet
f ime expect d
ed cr d
edit losses on
fifinancial assets and cat g
egorizes expect d
ed cr d
edit losses as allllowances for credidi l
t losses u d
nder the current expect d
ed cr d
edit loss
(“CECL )”) me hth d l
odol gy
ogy. Under the CECL model, financial institut
t ions are required to use historical information, current
conditions, and reasonabl
a e for
f
ecasts to estimate the expected loss over the life o
f
f the loan. The ACL on loans and leases
represents management’s estimate of all expected credit losses over the expected contractua
t
l life o
f
f our existing portfol
f io
loans. The level of the allowance refle
f cts management’s continuing evaluation of industry c
r
oncentrations; specific credit
risks; loan loss experience; current loan portfol
f io quality; changes in present economic, political and regulatory c
r
onditions;
other external fac
f
tors such as the ongoing pandemic; and unidentifie
f d losses inherent in the current loan portfol
f io. The
determination of the appropriate level of the allowance for
f
credit losses inherently involves a high degree of subj
u ectivity
and requires Mid Penn to make significant estimates of current credit risks and future trends, all of which may undergo
material changes. Changes in economic and market conditions affe
f cting borrowers, new information regarding existing
loans, identific
f ation of additional problem credits and other factors, both within and outside of Mid Penn’s control, impact
the determination of the allowance. In addition, bank regulatory a
r
gencies periodically review Mid Penn’s allowance for
f
credit losses and may require an increase in the provision for credit losses or the recognition of fur
f
ther loan charge-offs,
based on judgments different than those of management.
Any increase in the allowance will result in a decrease in net income and, possibly, capital, and may have a material
adverse effect on Mid Penn’s fin
f ancial condition and results of operations.
Competition fro
f
m other financial institutions may a
a
dverse
r
ly affe
f ct Mid Penn’s and the Bank’s profita
f
bility.
Mid Penn’s banking subs
u
idiary is subj
u ect to rapi
a d changes in technology, regulation, and product innovation, and fac
f
es
subs
u
tantial competition in originating both commercial and consumer loans. This competition comes principally from
f
other
banks, credit unions, savings institutions, mortgage banking companies and other lenders. Many of its larger competitors
who offer loans enjo
n y advantages over the Bank, including greater fin
f ancial resources and higher lending limits, a wider
geographic presence, more accessible branch office locations, the ability to offe
f r a wider array of services or more
fav
f
orable pricing alternatives, as well as lower origination and operating costs. This competition could reduc
d
e Mid Penn’s
net income by decreasing the number and size of loans that its banking subs
u
idiary originates, and the interest rates it may
charge on these loans.
In attracting business and consumer deposits, the Bank face
f
s substantial competition fro
f
m other insured depository
institutions such as other commercial banks, savings institutions, and credit unions, as well as institutions offe
f ring
uninsured investment alternatives, including money market funds
f
. Many of Mid Penn’s larger competitors who accept
deposits also enjo
n y advantages over the Bank, including greater financial resources, more aggressive marketing campaigns,
better brand recognition, and more convenient branch locations. These competitors may offer higher interest rates than Mid
Penn, which could decrease the deposits that the Bank attracts or require an increase in rates and interest expense to retain
existing deposits or attract new deposits. Increased deposit competition could adversely affect Mid Penn’s abi
a lity to
generate the funds
f
necessary for lending operations. As a result, Mid Penn may need to seek other sources of funds that
may be more expensive to obtain and could increase its cost of funds.
Mid Penn’s banking subs
u
idiary and nonbank subs
u
idiaries also compete with non-banking providers of financial services,
such as brokerage firms, consumer finance companies, credit unions, insurance agencies and governmental organizations,
which may offe
f r more fav
f
orable terms. Some of its non-banking competitors are not subj
u ect to the same extensive and
costly regulations that govern Mid Penn’s operations. As a result, such non-banking competitors may have advantages over
Mid Penn’s banking subs
u
idiary and nonbank subs
u
idiaries in providing certain products and services. This competition may
reduce or limit Mid Penn’s margins on banking services, revenues fro
f
m nonbanking subs
u
idiaries’ activities, reduce its
market share and adversely affect its earnings and fin
f ancial condition.
Mid Penn dep
d
ends on the accuracy and completeness of info
n rmation about customers a
r
nd counterpar
r
ties.
MID PENN BANCORP, INC.
18

In deciding whether to extend credit or enter into other transactions, Mid Penn may rely on infor
f
mation fur
f
nished by or on
behalf of customers and counterpa
r
rties, including financial statements, credit reports and other financial infor
f
mation. Mid
Penn may also rely on representations of those customers, counterpa
r
rties or other third parties, such as independent
auditors, as to the accuracy and completeness of that information. Reliance on inaccurate or misleading fin
f ancial
statements, credit reports or other fin
f ancial information could have a material adverse impact on Mid Penn’s business and,
in turn, Mid Penn’s fin
f ancial condition and results of operations.
The discontinuance of L
o
IBOR presents risk
i
s t
k
o the
t
financial instruments originated, h
d
eld o
l
r serviced by Mid Penn that
t
use
LIBO
I
R a
O
s a refe
e rence rate.
The London Interbank Offered Rate ("LIBOR") and certain other "benchmarks" are the subject of recent national,
international, and other regulatory g
r
uidance and proposals for
f
reform. These reforms may cause such benchmarks to
perform differently than in the past or have other consequences, which cannot be predicted. On July 27, 2017, the United
Kingdom’s Financial Conduct Authority ("FCA"), which regulates LIBOR, publicly announced that it intended to stop
persuading or compelling banks to subm
u
it LIBOR rates afte
f r 2021. Since then, regulators, industry g
r
roups and certain
committees (e.g., the Alternative Refer
f ence Rates Committee) have, among other things, published recommended fal
f l-back
language for LIBOR-linked fin
f ancial instruments, identified recommended alternatives for certain LIBOR rates (e.g., the
Secured Overnight Financing Rate ("SOFR") as the recommended alternative to U.S. Dollar LIBOR), and proposed
implementations of the recommended alternatives in floating rate instrum
r
ents.
The administrator of LIBOR ceased publishing most non-USD LIBOR settings beginning on January 1, 2022, and as of
July 1, 2023, the overnight one-month, three-month, six-month, and 12-month USD LIBOR settings were no longer
published.
Currently, SOFR is the alternative refer
f ence rate replacing LIBOR for
f
most types of transactions. SOFR is viewed as a
"riskless rate" as it is derived fro
f
m rates on overnight U.S. Treasury r
r
epurchase transactions, which are essentially
overnight loans secured by U.S. Treasury s
r
ecurities and are largely viewed as not presenting credit risk. The BSBY is
another alternative refer
f ence rate that is in use primarily in the loan market. BSBY is intended to refle
f ct large banks’
marginal wholesale cost of funds
f
and is a credit-sensitive rate with a for
f
ward-looking term structur
t
e.
The fai
f lure to properly transition away fro
f
m LIBOR may result in increased supe
u
rvisory s
r
crut
r iny. In addition, the
implementation of LIBOR reform proposals may result in increased compliance costs and operational costs, including costs
related to continued participation in LIBOR and the transition to a replacement refer
f ence rate or rates, which cannot
currently be reasonabl
a y estimated.
The discontinuance of LIBOR may result in uncertainty or differences in the calculation of the applicable interest rate or
payment amount depending on the terms of the governing documents, may adversely affect the value of Mid Penn’s
floating rate obligations, loans, deposits, derivatives, and other fin
f ancial instruments tied to LIBOR rates and may also
increase operational and other risks to Mid Penn and the industry,
r
including reputational and litigation risk.
The Basel III capi
a tal requirements r
t
equire Mid Penn to maintain highe
g
r levels o
l
f c
o
apital, which could r
l
educ
d
e profit
o
ability.
t
We are subject to comprehensive capital adequacy requirements intended to protect against losses that Mid Penn may
incur. Basel III establ
a ished higher levels of base capital, certain capital buffe
f rs, and a migration toward common equity as
the key source of regulatory c
r
apital. Although these capital requirements have been phased in and met by Mid Penn, the
Basel III requirements signal a growing effort by domestic and international bank regulatory a
r
gencies to require financial
institutions, including depository i
r
nstitutions, to maintain higher levels of capital. The Basel III implementation activities
and related regulatory c
r
apital targets required additional capital to support our business risk profile. Maintaining higher
levels of capital potentially reduc
d
es opportunities to leverage interest-earning assets, which could limit the net interest
income and profitabi
a lity of Mid Penn, and adversely impact our financial condition and results of operations.
Our SBA
S
lending program is depe
e
ndent upon the fed
f
er
d
al government, and we face specific
i
risk
i
s a
k
ssociated with
originating SBA
S
loans.
Our SBA lending program is dependent upon the fed
f
eral government. As an SBA Prefer
f red Lender, we enable our clients
to obtain SBA loans without being subject to the potentially lengthy SBA appr
a
oval process necessary for lenders that are
not SBA Prefer
f red Lenders. Our SBA lending program depends on interaction with the SBA, which is an independent
agency of the fed
f
eral government. During a laps
a
e of fundi
f
ng, such as a government shutdown, the SBA may not be able to
MID PENN BANCORP, INC.
19

engage in such interaction which may have a material adverse effect on our financial condition and the demand for
f
our
services could decline. The SBA periodically reviews the lending operations of participating lenders to assess, among other
things, whether the lender exhibits prude
r
nt risk management. When weaknesses are identifie
f d, the SBA may request
corrective actions or impose enfor
f
cement actions, including revocation of the lender’s Prefer
f red Lender status. If we lose
our status
t
as a Preferred Lender, we may lose some or all of our customers to lenders who are SBA Preferred Lenders.
Also, any changes to the SBA program, including changes to the level of guarantee provided by the federal government on
SBA loans, could adversely affect our business and earnings.
We generally sell the guaranteed portion of our SBA 7(a) program loans in the secondary market. These sales have resulted
in premium income for
f
us at the time of sale and created a stream of future servicing income. We may not be able to
continue originating these loans or selling them in the secondary market. Furthermore, even if we are able to continue
originating and selling SBA 7(a) program loans in the secondary market, we might not continue to realize premiums upon
u
the sale of the guaranteed portion of these loans. When we sell the guaranteed portion of our SBA 7(a) program loans, we
incur credit risk on the non-guaranteed portion of the loans, and if a customer defaults on the non-guaranteed portion of a
loan, we share any loss and recovery related to the loan pro-rata with the SBA. If the SBA establishes that a loss on an
SBA guaranteed loan is attributable to significant technical defic
f iencies in the manner in which the loan was originated,
funded or serviced by us, the SBA may deny its liabi
a lity under the guaranty for
f
the affec
f
ted loan or loans, reduc
d
e the
amount of the guaranty, or, if it has already paid under the guaranty, seek recovery of the principal loss related to the
deficiency from us, which could adversely affect our business and earnings.
The laws, regulations and standard operating procedur
d
es that are appl
a
icable to SBA loan products may change in the fut
f ur
t
e.
We cannot predict the effe
f cts of these changes on our business and profita
f
bi
a lity. Because government regulation greatly
affe
f cts the business and financial results of all commercial banks and bank holding companies, changes in the laws,
regulations and procedures applicable to SBA loans could adversely affect our business and earnings.
Acts of terrorism
i
, natural disa
i
sters,
r
global climate change, pandemics and global conflic
f
ts may h
a
ave a negat
e
ive impact on
our business and operations.
Acts of terro irism, natur
t
lal didisasters, glgl b
obal clilimate cha g
nge, pande i
mics, glgl b
obal conflilic
f
ts, and g
d geo
l
politic lal tensions (i(includidi g
ng
as a res lult of the Ru i
ssia- k
Ukraine a d
nd Isra lel-Hamas conflilic
f
ts) or other si i
imilar events c
l
ould h
d have a nega itive impact on our
bus
business a d
nd opera itions. Whihile we have business contin iui yty lplan i
s in place, su h
ch events occu i
rri g
ng or persis iting, su h
ch as hthe
COVID-19 or any fut
f ur
t
e pande i
mic, c
l
ould d
d disrupt
u
or delay the normal opera itions of our business a d
nd our fa icililities
(including communications and technology), result in harm to or cause travel limitations on our employees, and have a
similar impact on our clients, suppl
u
iers, third-party vendors and counterpa
r
rties. These events also could impact us
negatively to the extent that they result in reduced capi
a tal markets activity, lower asset price levels, or disruptions in
general economic activity in the United States or abr
a
oad, or in financial market settlement functions. In addition, these or
similar events may impact economic growth negatively, which could have an adverse effect on our business and operations
and may have other adverse effects on us in ways that we are unabl
a e to predict.
If Mid Penn’s i
’
nfor
f
mation syst
y ems are interrupt
u ed or sustain a breach in security, t
y
hos
t
e events may n
a
egatively a
l
ff
a ect
f
Mid
Penn’s f
’
in
f ancial perfo
r rmance and reput
e
ation.
In conducting its business, Mid Penn relies heavily on its infor
f
mation systems. Maintaining and protecting those systems
and data is diffi
f cult and expensive, as is dealing with any failure, interrupt
u ion, or breach in security of these systems,
whether due
d
to acts or omissions by Mid Penn or by a third party, and whether intentional or not. Any such failure,
interrupt
u ion, or breach could result in fai
f lures or disrupt
u ions in Mid Penn’s customer relationship management, general
ledger, deposit, loan, and other systems. A breach of Mid Penn’s infor
f
mation security may result fro
f
m fra
f udulent activity
committed against Mid Penn or its clients, resulting in fin
f ancial loss to Mid Penn or its clients, or privacy breaches against
Mid Penn’s clients. Such fra
f udulent activity may consist of check fraud, electronic fra
f ud, wire fraud, "phishing", social
engineering, identity theft, or other deceptive acts. The policies, procedur
d
es, and technical safeguards put in place by Mid
Penn to prevent or limit the effe
f ct of any fai
f lure, interrupt
u ion, or security breach of its information systems and data may be
insufficient to prevent or remedy the effects of any such occurrences. The occurrence of any failures, interrup
r
tions, or
security breaches of Mid Penn’s infor
f
mation systems and data could damage Mid Penn’s reputation, cause Mid Penn to
incur additional expenses, result in online services or other businesses becoming inoperabl
a e, subj
u ect Mid Penn to
regulatory s
r
anctions or additional regulatory s
r
crut
r iny, or expose Mid Penn to civil litigation and possible fin
f ancial liability,
any of which could have a material adverse effec
f
t on Mid Penn’s fin
f ancial condition and results of operations.
MID PENN BANCORP, INC.
20

Mid Penn’s b
’
usiness ope
o
rations and interaction with c
t
ustomers are increasingly d
l
one
d
via technology and electro
t
nic
delivery c
r
hannels, and this has increased risks related to cyb
c
er-attacks and cyber incidents.
t
In the normal course of business, we collect, process, and retain sensitive and confid
f ential infor
f
mation regarding our
customers. Although we devote significant resources and management foc
f
us to ensuring the integrity of our systems, Mid
Penn is exposed to the risk of cyber-attacks in the normal course of business. In general, cyber incidents can result from
deliberate attacks or unintentional events. An increased level of attention in the industry i
r
s foc
f
used on cyber-attacks that
include, but are not limited to, gaining unauthorized access to digital systems for purpos
r
es of misappropriating assets or
sensitive information, corrupt
u ing data, or causing operational disrupt
u ion. To combat against these attacks, Mid Penn has
certain security systems and policies and procedur
d
es in place to prevent or limit the effect of the possible security breach of
its information systems and it has insurance against some cyber-risks and attacks. While Mid Penn has not incurred any
material losses related to cyber-attacks, nor is it aware of any specific
f
or threatened cyber-incidents as of the date of this
report, it may incur subs
u
tantial costs and suffe
f r other negative consequences if it falls victim to successful
f
cyber-attacks.
Such negative consequences could include remediation costs that may include liabi
a lity for stolen assets or information and
repairing system damage that cyber-attacks may have caused; deploying additional personnel and protection technologies,
training employees, and engaging third party experts and consultants; lost revenues resulting fro
f
m unauthorized use of
proprietary information or the fai
f lure to retain or attract customers following an attack; litigation; and reputational damage
adversely affecting customer or investor confid
f ence, any of which could have a material adverse effect on our business,
financial condition or results of operations.
We are required to make a
k
number of j
o
udgments in applyi
l ng generally accepted accounting standards, and diffe
i
rent
estimates and assumptions in the appl
a
ication of t
o
he
t
se accounting standards could r
l
esult in a decr
d
ease in capi
a tal and/or
/
othe
t
r material changes to our repor
e
ts of fin
f
ancial condition and results of operations.
Generally accepted accounting principles involve certain estimates and processes that are particularly susceptible to
significant change, including those related to the determination of the allowance for
f
credit losses and reserve for
f
unfunde
f
d
lending commitments, the fair value of and potential impairment of certain financial instrum
r
ents including investment
securities, income tax assets or liabi
a lities (including deferred tax assets and any related valuation allowance), and share-
based compensation. While we have identifie
f d critical accounting policies and have procedur
d
es and processes in place to
suppor
u
t making the related judgments and estimates, changes to the processes, assumptions, or models in the appl
a
ication of
these generally accepted accounting principles, and the impact to the related judgments and estimates could result in a
decrease to net income and, possibly, capital and may have a material adverse effect on our financial condition and results
of operations. From time to time, the Financial Accounting Standards Board, and the SEC issues changes to or upda
u
ted
interpretations of the fin
f ancial accounting and reporting guidance that governs the preparation of Mid Penn’s financial
statements. These changes are beyond our control, can be diffi
f cult to predict, and could materially impact how we report
our financial condition and results of operations. We could be required to appl
a
y new or revised guidance retrospectively,
which may result in the revision of prior financial statements by material amounts. The implementation of new or revised
guidance could also result in material adverse effec
f
ts to our reported capital.
Mid Penn’s mortgage banking income may experience signi
g fic
i
ant volatility.
Mortgage ba ki
nki g
ng income is hihighl
ghly i
y influ
f enced b
d by the level a d
nd didirection of market for
f
ces in lcl di
udi g
ng mortgage interest
rates, and r
l
eal estate and refin
f an ici g
ng activity
ity.
i
Mid Penn s lells a sigig inifificant amount of re isidential mor gtg g
ag l
e loans into hthe
seco d
nda y
ry ma k
rket. The sale of hthes
l
e loans generates n
i
oninteres i
t income a d
nd can be a source of liliq iuididi yty for the Ba k
nk.
i
Disrupt
r
io i
n in the seco d
nda y
ry ma k
rket for resididen iti lal mortgage loans as w lell a d
s d
l
eclines in re lal estate values co luld res lul i
t in an
in b
abili
ility to s lell mor gtg g
ag l
e loans on hthe seco d
nda y
ry ma k
rket, whihi h
ch co luld n g
egativ lely i
y impact
i
Mid Penn’ l
s liq iuididi yty posi i
ition. A
de lclin i
e in r
l
eal estate values co luld d
d decrease the poten itial of mor gtg g
age o irigigina itions for Midid Penn,
h
which c
l
ould n g
egativ lely
impact our ear ini g
ngs.
d
Addidi itionally
lly, in lowe i
r interest rate e
i
nvironments, the dema d
nd for mor gtg g
ag
l
e loans and refin
f an ici g
ng activity
ity
i
willll te d
nd to
increase.
h
This has the effe
f ct of increasing fee
f
income but co luld advers lely i
y impact hthe estimated f
d f iai
f r v lalue of
i
Mid Penn’s
mortgage servicing rigights as the rate of loan prep y
ayment i
s increase. In hihighe
ghe i
r interest rate e
i
nvironments, the dema d
nd for
mortgage loans a d
nd refifinancing activity
ity
i
willll generally
lly be lower.
h
This has the effe
f ct of decreasing mor gtg g
ag
l
e loan
origiginations and refin
f ance activities, and r lelat d
ed fe i
e income opportu ini ities.
Mid Penn could b
l
e required to repurchase mortgage loans or indemnify mortgage
t
loan purchasers d
r
ue
d
to breaches of
repr
e
esentations and warranties, borrower fra
f
ud, or certain borrower def
d aul
f
ts, which could h
l
ave a material adverse
r
impac
m
t
on our liquidity, r
y
esults of operations and financial condition.
MID PENN BANCORP, INC.
21

Mid Penn originates and sells a significant amount of residential mortgage loans into the secondary market. When Mid
Penn sells mortgage loans, Mid Penn is required to make customary representations and warranties to purchasers about
a
the
mortgage loans and the manner in which they were originated. The agreements pursuant to which the loans are sold require
Mid Penn to repurchase or substitute mortgage loans in the event there was a breach of any of these representations or
warranties. In addition, Mid Penn may be required to repurchase mortgage loans as a result of borrower fra
f ud or in the
event of early payment defau
f
lt of the borrower on a mortgage loan. If repurchase and indemnity demands increase
significantly, Mid Penn’s liquidity, results of operations and fin
f ancial condition may be adversely affected.
Mid Penn’s profi
o tability d
t
ep
d
ends signi
i
fic
i
antly on economic conditions in Pennsyl
s vania.
Unlike larger or regional fin
f ancial institutions that are more geographically diversifie
f d, Mid Penn’s success is dependent to
a significant degree on economic conditions in Pennsylvania, especially in the eighteen counties and the specific markets
primarily served by Mid Penn. The banking industry i
r
s affected by general economic conditions, including the effec
f
ts of
inflation, recession, unemployment, real estate values, trends in national and global economics, and other factors beyond
our control. An economic recession or a delayed recovery over a prolonged period of time in Pennsylvania, or more
specific to the counties or communities in Pennsylvania served by Mid Penn, could cause an increase in the level of the
Bank’s non-performing assets and loan losses, thereby causing operating losses, impairing liquidity, and eroding capital.
Mid Penn cannot assure that adverse changes in the local and state economy supporting its market area would not have a
material adverse effect on Mid Penn’s consolidated financial condition, results of operations, and cash flo
f ws.
Mid Penn is s
i
ubject to claims and litigation pertaining to fid
f uc
d
iary responsibility.
From time to time, customers and shareholders may make claims and take legal action pertaining to Mid Penn’s
performance of its fid
f uc
d
iary responsibilities. Whether such claims and legal action related to Mid Penn’s performance of its
fiduciary responsibilities are founded or unfounde
f
d, if such claims and legal actions are not resolved in a manner fav
f
orable
to Mid Penn, the claims or related litigation processes may result in significant fin
f ancial expense and liabi
a lity, and/or
adversely affect the market perception of Mid Penn and its produc
d
ts and services, as well as impact customer demand for
those products and services. Any fin
f ancial liabi
a lity or reputation damage could have a material adverse effec
f
t on Mid
Penn’s business, which, in turn, could have a material adverse effect on Mid Penn’s fin
f ancial condition and results of
operations.
Mid Penn ope
o
rates in a highl
i
y r
l
egulated environment and may b
a
e adverse
r
ly affe
f cted by changes in fed
f
er
d
al, s
l
tate and local
laws and regul
e
ations.
The Corpor
r
ation, the Bank, and its nonbank subs
u
idiaries are collectively subject to extensive regulation, supe
u
rvision, and
examination by federal and state banking authorities. The potential exists for
f
additional or amended fed
f
eral or state laws
and regulations, or changes in supervisory p
r
olicies or activities, to materially affe
f ct many aspects of Mid Penn’s operations,
including capital levels, lending and fundi
f
ng practices, and liquidity standards. New laws and regulations may increase
costs of regulatory c
r
ompliance and of doing business and otherwise affect operations and may significantly affect
f
the
markets in which Mid Penn does business, the markets for and value of Mid Penn’s loans and investments, the abi
a lity to
attract deposits at a reasonabl
a e cost, the fees
f
charged, and ongoing operations, costs and profitabi
a lity. Further, additional
legislation and regulations that could significantly affe
f ct Mid Penn’s powers, authority and operations may be enacted or
adopted in the fut
f ur
t
e, which could have a material adverse effec
f
t on its financial condition and results of operations. Also,
regulators have significant discretion and authority to prevent or remedy unsafe o
f
r unsound practices or violations of laws
by banks and bank holding companies in the performance of their supervisory a
r
nd enforcement dut
d ies. Any changes in
applicable regulations or federal, state or local legislation, or the exercise of bank regulatory a
r
uthority, may have a negative
impact on Mid Penn’s results of operations, fin
f ancial condition, and its ability to pay dividends on common stock. The
burden imposed by federal and state regulators puts Mid Penn at a competitive disadvantage compared to less regulated
competitors such as finance companies, mortgage banking companies and leasing companies.
In addition, changes in laws or regulations that affe
f ct Mid Penn’s customers and business partners could negatively affec
f
t
Mid Penn’s revenues and expenses. Certain changes in laws such as tax law refor
f
ms that impose limitations on the
deductibility of interest may decrease the demand for Mid Penn’s products or services and could negatively affect
f
its
revenues and results of operations. Other changes in laws or regulations could cause Mid Penn’s third-party service
providers and other vendors to increase the prices they charge to Mid Penn and negatively affect Mid Penn’s expenses and
financial results.
MID PENN BANCORP, INC.
22

The soundness of othe
t
r fin
f ancial institutions may a
a
dverse
r
ly affe
f ct Mid Penn.
Financial services institutions are interrelated as a result of trading, clearing, counterpa
r
rty, or other relationships. Mid Penn
has exposure to many diffe
f rent industries and counterpa
r
rties, and routinely executes transactions with counterpa
r
rties in the
financial services industry,
r
including commercial banks, brokers and dealers, investment banks, and other institutional
clients. Many of these transactions expose Mid Penn to credit risk and losses in the event of a default by a counterpa
r
rty or
client. Any such losses could have a material adverse effec
f
t on Mid Penn’s fin
f ancial condition and results of operations.
During 2023, five banks either failed or were sold in an FDIC-assisted transaction. Mid Penn did not have any direct
exposure to any of the affected banks. However, if other banks or financial institutions enter receivership or become
insolvent in the future in response to financial conditions affe
f cting the banking system and fin
f ancial markets, our ability to
access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effec
f
t on
our business and financial condition.
Volatility in financial marke
r
ts and the economy m
m
ay have materially adverse
r
effe
f cts o
t
n our liquidity and financial
condition.
The capital and credit markets have recently experienced extreme volatility and economic disrupt
r
ion, most recently due to
the takeover by the FDIC of both Silicon Valley Bank ("SVB") and Signature Bank in March 2023, and, prior to that, due
to the COVID-19 pandemic. Adverse fin
f ancial market and economic conditions can exert downward pressure on stock
prices, security prices, and credit availabi
a lity for certain issuers without regard to their underlying financial strength. The
volatility resulting fro
f
m the failures of SVB and Signature Bank has particularly impacted the price of securities issued by
financial institut
t ions, including Mid Penn’s.
If such levels of financial market and economic disrup
r
tion and volatility continue, there can be no assurance that Mid Penn
will not experience adverse effects, which may materially affe
f ct its liquidity, fin
f ancial condition, and profitabi
a lity.
Mid Penn’s b
’
anking subsidiary may b
a
e required to pay highe
i
r FDI
F
C i
I
nsurance premiums or spe
s
cial assessments which
may a
a
dverse
r
ly affe
f ct its earnings.
Poor economic conditions and the resulting bank fai
f lures fro
f
m the most recent recession stressed the DIF and increased the
costs of the Bank’s FDIC insurance assessments. Promptly following the recent fai
f lures of SVB and Signature Bank in
March 2023, the fed
f
eral banking regulators announced that the FDIC will use funds
f
from the DIF to ensure that all
depositors in SVB and Signature Bank are made whole, at no cost to taxpayers. Mid Penn anticipates that the FDIC will
impose additional special assessments on all banks in order to replenish the DIF. Mid Penn generally is unabl
a e to control
the amount of premiums or special assessments that its banking subs
u
idiary is required to pay for FDIC insurance. As of
December 31, 2024, Mid Penn has not been subj
u ect to additional special assessments. Any special assessments or future
changes in the calculation or assessment of FDIC insurance premiums may have a material adverse effect on the results of
Mid Penn’s operations and fin
f ancial condition.
If we conclude that there is a
i
decline in the
t
value of a
o
ny of our AFS investment securities, we may b
a
e required to record an
allowance for
f
credit losses where periodic changes are recognize
i
d in earnings.
Mid Penn reviews its availabl
a e-for-sale investment securities portfol
f io at each quarter-end reporting period to determine if
any security has a fair value less than its amortized cost. To determine whether a decline in fai
f r value resulted fro
f
m a credit
loss or other fac
f
tors, Mid Penn performs fur
f
ther analysis as outlined below:
•
Review the extent to which the fair value is less than the amortized cost and observe the security’s lowest credit
rating as reported by third-party credit ratings companies.
•
The securities that violate the credit loss triggers above would be subjected to additional analysis that may include,
but is not limited to: changes in market interest rates, changes in securities credit ratings, security type, service
area economic factors, financial performance of the issuer/o
r r obligor of the underlying issue and third-party
guarantee.
•
If Mid Penn determines that a credit loss exists, the credit portion of the allowance will be measured using a DCF
analysis using the effe
f ctive interest rate as of the security’s purchase date. The amount of credit loss Mid Penn
records will be limited to the amount by which the amortized cost exceeds the fair value.
MID PENN BANCORP, INC.
23

Due to the complexity of the process, inputs, calculations, and assumptions used in determining whether an investment is in
an unrealized loss position, Mid Penn’s assessment of or disclosure of the credit loss on investments may not accurately
reflect the actua
t
l credit loss in the future.
Mid Penn is s
i
ubject to environmental, social and governance ("ESG
E
") risk
i
s t
k
hat
t
could a
l
dverse
r
ly affe
f ct our results of
operations, reputation, and the market
r
price of o
o
ur securities.
Mid Penn is subject to a variety of risks arising from ESG matters. ESG matters include environmental and climate change
activism, diversity activism, and racial and social justice issues. Such matters may involve our personnel, customers, or
third parties with whom we do business. Risks arising from ESG matters may adversely affect, among other things, our
reputation and the market price of our securities. Further, Mid Penn may be exposed to negative publicity based on the
identity and activities of our shareholders, those to whom we lend and with which we otherwise do business, and the
public’s view of the appr
a
oach and requirements of our state or fed
f
eral regulators, customers, and business partners with
respect to ESG matters. Any such negative publicity could arise through traditional media or electronic social media
platforms. Mid Penn’s relationships and reputation with our existing and prospective customers and third parties with
which we do business could be damaged if we were to become the subject of any such negative publicity. This, in turn,
could have an adverse effect on Mid Penn’s abi
a lity to attract and retain customers and employees and could have a negative
impact on the market price for our securities.
Investor advocacy groups, investment funds and influ
f ential investors have begun to consider the steps taken and resources
allocated by financial institutions and other commercial organizations with respect to ESG matters when making
investment decisions. Certain investors are beginning to incorporate the business risks of ESG regulation and activism and
the adequacy of companies’ responses to these into their investment decisions. These shifts
f
in investing priorities may
result in adverse effects on the market price of Mid Penn’s securities.
The U.S. Congress, state legislatures and federal and state regulatory a
r
gencies, as well as certain stock exchanges, continue
to propose numerous initiatives related to ESG matters. The lack of empirical data surrounding the credit and other
financial risks posed by ESG regulation and activism render it impossible to predict how specifically ESG matters may
impact Mid Penn’s fin
f ancial condition and results of operations.
Federal and state banking regulators and supe
u
rvisory a
r
uthorities, investors and other stakeholders have increasingly viewed
financial institutions as a tool to effe
f ct ESG activism, both directly and with respect to their customers, which may result in
financial institutions coming under increased pressure regarding the disclosure and management of ESG matters. Given
that ESG matters could impose systemic risks upon
u
the fin
f ancial sector, via disrupt
r
ions in economic activity resulting fro
f
m
activism, Mid Penn fac
f
es increasing focus on our resilience to ESG risks. Ongoing legislative or regulatory u
r
ncertainties
and changes regarding ESG risk management and practices may result in higher regulatory,
r
compliance, credit and
reputational risks and costs.
Actual or perceived shortcomings with respect to these ESG initiatives and reporting can impact Mid Penn’s abi
a lity to hire
and retain employees, increase its customer base or attract and retain certain types of investors. In addition, certain
organizations that provide corporate governance and other corporate risk infor
f
mation to investors and shareholders have
developed scores and ratings to evaluate companies based upon ESG metrics. Collecting, measuring, and reporting ESG
information and metrics can be costly, diffi
f cult and time consuming, is subj
u ect to evolving reporting standards, and can
present numerous operational, reputational, financial, legal and other risks, any of which could have a material impact,
including on Mid Penn’s reputation and stock price.
Mid Penn is s
i
ubject to environmental liability risk
i
associated with lending activities.
A significant portion of Mid Penn’s loan portfol
f io is secured by real property. During the ordinary c
r
ourse of business, Mid
Penn may for
f
eclose on and take title to properties securing certain loans. In doing so, there is a risk that hazardous or toxic
subs
u
tances could be found
f
on these properties. If hazardous or toxic substances are found,
f
Mid Penn may be liabl
a e for
f
remediation costs, as well as for
f
personal injury a
r
nd property damage. Environmental laws may require Mid Penn to incur
subs
u
tantial expenses and may materially reduce the affe
f cted property’s value or limit Mid Penn’s abi
a lity to use or sell the
affe
f cted property. In addition, future laws or more stringent interpretations or enforcement policies with respect to existing
laws may increase Mid Penn’s exposure to environmental liabi
a lity. Although Mid Penn has policies and procedur
d
es to
perform an environmental review befor
f
e initiating any foreclosure action on real property, these reviews may not be
sufficient to detect all potential environmental hazards. The remediation costs and any other fin
f ancial liabi
a lities associated
MID PENN BANCORP, INC.
24

with an environmental hazard could have a material adverse effect on Mid Penn’s fin
f ancial condition and results of
operations.
Mid Penn’s f
’
in
f ancial perfo
r rmance may s
a
uffe
f r if i
i
ts info
n rmation technology is unable to keep
k
pace with its growth or
industry d
r
evel
d
opments.
Effe
f ctive and competitive delivery of Mid Penn’s products and services is increasingly dependent upon the successful
f
and
uninterrupt
u ed functioning of our information technology resources and processes provided both internally and through third
party vendors. In addition to better serving customers, the effective use of technology increases effi
f ciency and enabl
a es Mid
Penn to reduce costs. Mid Penn’s fut
f ur
t
e success will depend, in part, upon
u
its ability to address the needs of its customers
by effe
f ctively and safely using technology to provide produc
d
ts and services to enhance customer convenience, attract
customers who prefer
f
technological delivery c
r
hannels, and to create additional efficiencies in its operations. Many of Mid
Penn’s competitors have greater resources to invest in technological improvements and infrastructur
t
e. Additionally, as
technology and infor
f
mation security requirements in the financial services industry c
r
hange and evolve, keeping pace
becomes increasingly complex and expensive for
f
Mid Penn. There can be no assurance that Mid Penn will be able to
effe
f ctively keep pace with these technological advancements or the related subs
u
tantial costs and investments required,
which could adversely affect its financial condition and results of operations.
Growing by a
b
cquisi
i tion entails certain risks, and diffi
i
culties in integr
e
ating past or fut
f ure acquisi
i tions could a
l
dverse
r
ly
affe
f ct our business.
On November 1, 2024, Mid Penn announced the signing of a defin
f itive merger agreement to acquire William Penn
Bancorpor
r
ation and its wholly-owned subs
u
idiary, William Penn Bank. Mid Penn has completed fou
f
r other whole bank
merger acquisitions in recent years (The Scottdale Bank & Trus
r
t Company and First Priority Financial Corp.
r
in 2018,
Riverview Financial Corporation on November 30, 2021, and Brunswick Bancorp o
r
n May 19, 2023), as well as two
nonbank acquisitions.
Generally, Mid Penn must receive fed
f
eral and state regulatory a
r
ppr
a
oval befor
f
e it can acquire a bank or bank holding
company. In determining whether to approve a proposed bank acquisition, bank regulators will consider, among other
factors, the effec
f
t of the acquisition on competition and future prospects. Regulators also review current and proje
o cted
capital ratios and levels, the competence, experience and integrity of management and its record of compliance with laws
and regulations. We cannot be certain when or if, o
f
r on what terms and conditions, any required regulatory a
r
ppr
a
ovals will
be granted. Growth by acquisition involves substantial risks, as the ultimate success of such acquisitions may depend on,
among other things, the ability to realize anticipated cost savings and to integrate the acquired companies and operation in a
manner that does not result in decreased revenues. Excessive acquisition costs, conversion costs and the disrupt
r
ion of
existing customer relationships in both the acquired companies and legacy markets may occur. If we are not able to
successful
f ly achieve the fin
f ancial effi
f ciencies or integration and growth objectives of acquisitions, the anticipated benefits
of an acquisition may not be realized fully, or at all, or may take longer to realize than planned.
Further, the asset quality or other financial characteristics of an acquired company may deteriorate from the date a merger
or other acquisition agreement is entered into and when the transaction is completed or the post-merger period.
Mid Penn has spent and may continue to spend significant resources identifyi
f ng companies and businesses to acquire. The
effi
f cient and effe
f ctive integration of any companies and businesses we acquire and integrate into our organization is critical
to our growth. Our recent acquisitions, and any fut
f ur
t
e acquisitions, involve numerous risks including difficulties in
integrating the cultur
t
e, operations, technologies and personnel of the acquired companies, the diversion of management’s
attention fro
f
m other business concerns and the potential loss of customers. Failure to fully integrate the operations of any
acquired business successful
f ly, or to integrate the operations of future acquisition targets, could harm Mid Penn’s business,
financial condition, results of operations and cash flo
f ws.
We plan to pursu
r
e a growth stra
t
tegy
e
and there are risk
i
s a
k
ssociated with rapi
a d gro
g
wth.
t
We intend to pursue a growth plan consistent with our prior business strategy, including growth by acquisition, as well as
leveraging our existing branch network or adding new branch locations or offi
f ces and personnel in current and adjacent
markets we choose to serve. Our recent acquisitions and the pending William Penn acquisition are reflective of our growth
strategy.
MID PENN BANCORP, INC.
25

Our abi
a lity to manage growth successful
f ly will depend on our ability to attract or retain qualifie
f d personnel, maintain cost
controls and efficiencies, and ensure our areas of growth continue to meet our high asset quality standards, while attracting
additional loans and deposits on fav
f
orable terms, as well as on factors beyond our control, such as economic conditions and
competition in existing and new markets. If we grow too quickly and are not able to attract qualifie
f d personnel, control
costs and maintain asset quality, this continued rapid growth could materially adversely affect our financial performance.
The value of our goodwill and othe
t
r intangible assets may d
a
ec
d
line in the fut
f ure.
As of December 31, 2024, we had $128.2 million of goodwill and $6.2 million of other intangible assets. A significant
decline in our expected future cash flo
f ws, a significant adverse change in the business climate, slower economic growth or
a significant and sustained decline in the price of our common stock, any or all of which could be materially impacted by
many of the risk fac
f
tors discussed herein, may necessitate our taking charges in the future related to the impairment of our
goodwill. Future regulatory a
r
ctions could also have a material impact on assessments of goodwill for impairment. If we
were to conclude that a fut
f ur
t
e write-down of our goodwill is necessary, we would record the appr
a
opriate charge, which
could have a material adverse effect on our results of operations. We cannot provide assurance that we will not be required
to take an impairment charge in the future. Any such charge would have an adverse effect on our shareholders’ equity and
financial results and could cause a decline in our stock price.
Identifia
f bl
a e intangible assets other than goodwill consist of core deposit intangibles, books of business, and other intangible
assets. Adverse events or circumstances could impact the recoverabi
a lity of these intangible assets including loss of core
deposits, significant losses of customer accounts and/or balances, increased competition, or adverse changes in the
economy. To the extent these intangible assets are deemed unrecoverabl
a e, a non-cash impairment charge would be
recorded, which could have a material adverse effec
f
t on our results of operations.
Risks Related to the Merger
Failure to complete the Mer
M
ge
r
r could n
l
egatively a
l
ff
a ec
f
t our market
k
price, future business and financial results.
Although we anticipate closing the Merger in the second quarter of 2025, we cannot guarantee when, or whether, the
Merger will be completed. If the Merger is not completed for
f
any reason, we will be subj
u ect to a number of material risks,
including the fol
f lowing:
•
Costs related to the Merger, such as legal, accounting and financial advisory fees, and, in specific circumstances,
additional reimbursement and termination fee
f
s, must be paid even if the Merger is not completed.
•
Declines in our market price to the extent that the current market price of our common stock already refle
f cts a
market assumption that the Merger will be completed.
•
The diversion of management’s attention fro
f
m the day-to-day business operations and the potential disrupt
u ion to
each company’s employees and business relationships during the period before the completion of the Merger may
make it difficult to regain financial and market positions if the Merger does not occur.
•
Becoming subj
u ect to litigation related to any fai
f lure to complete the Merger.
Regul
e
atory w
r
aivers and approvals m
l
ay not be received or may be received and subsequently expire, be revoked or be
amended to impose conditions that are not presently a
l
nticipated or cannot be met.
Before the transactions contemplated in the Merger Agreement, including the Merger, may be completed, various waivers,
approvals or consents must be obtained fro
f
m various bank regulatory a
r
nd other authorities, including the Board of
Governors of the Federal Reserve System, the FDIC, and the Pennsylvania Department of Banking and Securities. In
determining whether to grant these approvals, regulatory a
r
uthorities consider a variety of factors, including the regulatory
r
standing of each party. These appr
a
ovals could be delayed or not obtained at all, including due to any or all of the fol
f lowing:
an adverse development in any party’s regulatory s
r
tanding or any other factors considered by regulators in granting such
approvals; governmental, political, or community group i
u
nquiries, investigations or opposition; or changes in legislation or
the political or regulatory e
r
nvironment generally, including as a result of changes of the U.S. executive administration, or
Congressional leadership and regulatory a
r
gency leadership.
Even if the appr
a
ovals are granted, they may impose terms and conditions, limitations, obligations or costs, or place
restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions
contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions,
limitations, obligations, or restrictions or that such conditions, limitations, obligations, or restrictions will not have the
MID PENN BANCORP, INC.
26

effe
f ct of delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional
material costs on or materially limiting the revenues of the combined company fol
f lowing the Merger or otherwise reduce
the anticipated benefits of the Merger if the Merger were completed successful
f ly within the expected timefra
f me. In
addition, there can be no assurance that any such conditions, limitations, obligations, or restrictions will not result in the
delay or aba
a
ndonment of the Merger. The completion of the Merger is conditioned on the receipt of the requisite regulatory
r
approvals without the imposition of any materially burdensome regulatory c
r
ondition and the expiration of all statut
t ory
r
waiting periods. Additionally, the completion of the Merger is conditioned on the absence of certain orders, injunctions, or
decrees issued by any court or any governmental entity of competent jurisdiction that would prevent, prohibit, or make
illegal the completion of the Merger or any of the other transactions contemplated by the Merger Agreement.
Despite the parties’ expected commitment to use their reasonabl
a e best efforts to respond to any request for infor
f
mation and
resolve any objection that may be asserted by any governmental entity with respect to the Merger Agreement, neither party
is required under the terms of the Merger Agreement to take any action, commit to take any action, or agree to any
condition or restriction in connection with obtaining these appr
a
ovals, that would reasonabl
a y be expected to have a material
adverse effect on the combined company and its subs
u
idiaries, taken as a whole, afte
f r giving effect to the proposed Merger.
Further, such approvals are subject to expiration if the transaction is not consummated within the time period provided in
the appr
a
oval.
Combining Mid
M
Penn and William Penn may be more diffi
i
cult, costly or time consuming than
t
expected, a
d
nd we may f
a
ai
f l to
realize the
t
anticipated benefi
e ts of the Mer
M
ge
r
r.
The success of the Merger will depend on, among other things, our ability to integrate William Penn into our business in a
manner that fac
f
ilitates growth opportunities and achieves the anticipated benefits of the Merger. If we are not able to
successful
f ly achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take
longer to realize than expected. In addition, the actua
t
l cost and savings and anticipated benefits of the Merger could be less
than anticipated, and integration may result in additional unfor
f
eseen expenses.
Litigation relating to the
t
Merger could r
l
equire us to incur signi
g fic
i
ant costs a
t
nd suffe
u
r management dist
i ra
t
ction, as well as
delay a
a
nd/or
/
enjo
n in the Mer
M
ge
r
r.
We are not currently able to predict the outcome of any suit arising out of or relating to the proposed Merger that may be
filed in the future. If any complaints are file
f
d, absent allegations that are material, We will not necessarily announce such
filings.
We could be subject to demands or litigation related to the Merger, whether or not the Merger is consummated. Such
actions may create additional uncertainty relating to the Merger, and responding to such demands and defen
f
ding such
actions may be costly and distracting to management. Although there can be no assurance as to the ultimate outcomes of
any demand or any subs
u
equent litigation, we do not believe that the resolution of such demands or any subsequent
litigation will have a material adverse effect on our financial position, results of operations or cash flo
f w.
We will be subject to various uncertainties while the Mer
M
ge
r
r is p
i
ending that could a
l
dverse
r
ly affe
f ct our financial results or
the anticipated benefi
e ts of the Mer
M
ge
r
r.
Uncertainty about the effect of the Merger on counterpa
r
rties to contracts, employees and other parties may have an adverse
effe
f ct on us or the anticipated benefits of the Merger. These uncertainties could cause contract counterpa
r
rties and others
who deal with us or William Penn to seek to change existing business relationships with us or William Penn, and may
impair our or William Penn’s abi
a lity to attract, retain and motivate key personnel until the Merger is completed and for
f
a
period of time thereafter. Employee retention and recrui
r tment may be particularly challenging prior to the completion of
the Merger, as our employees and prospective employees, and the employees and prospective employees of William Penn,
may experience uncertainty about their fut
f ur
t
e roles with us following the Merger.
The pursuit of the Merger and the preparation for
f
the integration of the two companies may place a significant burden on
management and internal resources. Any significant diversion of management attention away fro
f
m ongoing business and
any diffi
f culties encountered in the transition and integration process could affect our financial results prior to and/or
following the completion of the Merger and could limit us fro
f
m pursuing attractive business opportunities and making
other changes to our business prior to completion of the Merger or termination of the Merger Agreement.
MID PENN BANCORP, INC.
27

William Penn may h
a
ave liabilities that are not known to us.
In connection with the Merger, we will assume all of William Penn’s liabi
a lities by operation of law. There may be
liabi
a lities that we failed or were unabl
a e to discover in the course of performing due
d
diligence investigations into William
Penn, or we may not have correctly assessed the significance of certain liabi
a lities of William Penn identifie
f d in the course
of our due diligence. Any such liabi
a lities, individually or in the aggregate, could have an adverse effect on our business,
financial condition, and results of operations.
We expect to incur substantial tra
t
nsaction costs in connection with the Mer
M
ge
r
r.
We expect to incur a significant amount of non-recurring expenses in connection with the Merger, including legal,
accounting, consulting, and other expenses. In general, these expenses are payable by us whether or not the Merger is
completed. Additional unanticipated costs may be incurred fol
f lowing consummation of the Merger in the course of the
integration of our businesses and the business of William Penn. We cannot be certain that the elimination of dupl
d
icative
costs or the realization of other effi
f ciencies related to the integration of the two businesses will offs
f et the transaction and
integration costs in the near term, or at all.
The Mer
M
ge
r
r may be completed on different terms fro
f
m thos
t
e contained in the Mer
M
ge
r
r Agreement.
Prior to the completion of the Merger, we and William Penn may, by mutua
t
l agreement, amend or alter the terms of the
Merger Agreement, including with respect to, among other things, the Merger consideration or any covenants or
agreements with respect to the parties’ respective operations during the pendency of the Merger Agreement. Any such
amendments or alterations may have negative consequences to us.
The Mer
M
ge
r
r will not be completed unless important conditions are satisfie
s
d or waived, i
d
ncluding approval of the Mer
M
ge
r
r
Agre
g
ement by o
b
ur shareholde
l
rs and William Penn’s shareholde
l
rs.
Specified conditions set for
f
th in the Merger Agreement must be satisfied or waived to complete the Merger. If the
conditions are not satisfied or, subject to applicable law, waived, the Merger will not occur or will be delayed and each of
William Penn and us may lose some or all of the intended benefit
f s of the Merger.
Risks Related to Mid Penn Common Stock
The tra
t
ding volume in Mid Penn’s common stock is less than that of othe
t
r large
r
r fin
f ancial services companies.
Mid Penn’s common stock is listed for trading on NASDAQ (symbol: MPB); however, the trading volume in its common
stock is less than that of other larger financial services companies. A public trading market having the desired
characteristics of depth, liquidity and orderliness depends on the presence in the marketpl
t ace of willing buyers and sellers
of Mid Penn’s common stock at any given time. This presence depends on the individual decisions of investors and general
economic and market conditions over which Mid Penn has no control. Given the generally lower trading volume of Mid
Penn’s common stock, significant sales of Mid Penn’s common stock, or the expectation of these sales, could cause Mid
Penn’s stock price to fal
f l.
The market
r
price of M
o
id
M
Penn common stock may f
a
lu
f ctuate signi
g fic
i
antly, a
y
nd this may m
a
ake i
k
t difficult for
f
investors to
resell shares of common stock owned by t
b
he
t
m at times or at prices they find attractive.
The market price of our common stock as reported on NASDAQ is subj
u ect to constant change during business trading
hours. We expect that the market price of Mid Penn common stock will continue to fluctuate and there can be no assurance
about the stabi
a lity or trend of market prices for Mid Penn common stock. Stock price volatility, particularly with a stock
like ours with lower trading volumes than larger financial services companies, may make it diffi
f cult for investors to resell
their Mid Penn common stock when they want and at times or prices that they find attractive. Mid Penn’s stock price may
fluctuate significantly as a result of a variety of fact
f
ors, many of which are beyond our control. These fact
f
ors include those
described elsewhere in this entire "Risk Factors" section, in this document, and our other filin
f
gs with the SEC.
Mid Penn’s ability to pay dividends on its common stock, a
k
nd principal
i
and interest on its subordinated notes, dep
d
ends
primarily on dividends from its b
t
anking subsidiary, w
y
hich is subject to regul
e
atory l
r
imits.
MID PENN BANCORP, INC.
28

Mid Penn is a bank holding company and its operations are conducted primarily by its banking subs
u
idiary. Mid Penn’s
ability to pay dividends on its common stock, and principal and interest on its subor
u
dinated notes, depends on its receipt of
dividends from the Bank. Dividend payments from its banking subs
u
idiary are subject to legal and regulatory l
r
imitations,
generally based on net profit
f s and retained earnings, imposed by the respective regulatory a
r
gencies that supervise the Bank.
The abi
a lity of the Bank to pay dividends is also subj
u ect to profita
f
bi
a lity, fin
f ancial condition, liquidity, and capital
management limits. There is no assurance that Mid Penn’s banking subs
u
idiary or other subsidiaries establ
a ished in the future
will be able to pay dividends, or that Mid Penn itself will generate adequate cash flo
f w to pay dividends in the fut
f ur
t
e.
Federal Reserve policy, which appl
a
ies to Mid Penn as a registered bank holding company, also provides that dividends by
bank holding companies should generally be paid out of earnings from both the current period and a designated look-back
period. Mid Penn’s abi
a lity to pay dividends on its common stock, or the amount of any dividends paid, could have a
material adverse effect on the market price of its common stock.
Mid Penn may need to, or be required to, raise additional capi
a tal in the
t
future, and capi
a tal may not be available when
needed
d
and on terms fav
f
orable to current stockholde
l
rs.
Federal banking regulators require the Corpor
r
ation and the Bank to maintain adequate levels of capital to support their
operations. These capi
a tal levels are determined and dictated by law, regulation, and banking regulatory a
r
gencies.
Regulators may, fro
f
m time to time, implement changes to regulatory c
r
apital adequacy guidelines. Furthermore, regulators
may require that the Corpor
r
ation and/or the Bank to maintain higher levels of capital based on their condition, risk profile
f
,
growth plans, or conditions in the banking industry o
r
r economy. Failure to maintain capital to meet current or futur
t
e
regulatory r
r
equirements could have a significant material adverse effect on Mid Penn’s business, financial condition, and
results of operations. In addition, capi
a tal levels are also determined by Mid Penn’s management and board of directors,
based on capital levels that they believe are necessary to suppor
u
t Mid Penn’s business operations.
If Mid Penn raises capital through merger and acquisition activities, or through the issuance of additional shares of its
common stock or other securities, it would likely dilute the ownership interests of current investors and could dilute the per
share book value and earnings per share of its common stock. Furthermore, a capital raise through issuance of additional
shares may have an adverse impact on Mid Penn’s stock price. New investors also may have rights, prefer
f ences, and
privileges senior to Mid Penn’s current common stockholders, which may adversely impact its current common
stockholders.
Mid Penn’s abi
a lity to raise additional capital will depend on conditions in the capital markets at that time, which are outside
of its control, and on its financial performance. Accordingly, Mid Penn cannot be certain of its ability to raise additional
capital on acceptabl
a e terms and acceptabl
a e time frames or to raise additional capital at all. The inabi
a lity to raise capital in
sufficient amounts may adversely affect Mid Penn’s business, financial condition and results of operations.
Offe
f rings of debt, w
t
hich would b
l
e senior to Mid
M
Penn’s common stock upon liquidation, and/or
/
prefer
f
red equity securities
which may be senior to our common stock for purpos
r
es of dividend dist
i ri
t butions or upon liquidation, may a
a
dverse
r
ly affe
f ct
the market
r
price of o
o
ur common stock.
Mid Penn may attempt to increase its capital resources if the Corpor
r
ation’s or the Bank’s capital ratios fal
f l below the
required minimums. The Corporation or the Bank could be required to raise additional capital by making additional
offe
f rings of debt or prefer
f red equity securities, including medium-term notes, senior or subordinated notes and preferred
stock. Because our decision to issue securities in any future offe
f ring will depend on market conditions and other factors
beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offe
f rings. If a future
liquidation of Mid Penn occurs, holders of debt securities and shares of preferred stock and lenders with respect to other
borrowings are likely to receive distributions of availabl
a e assets prior to the holders of our common stock. Additional
equity offe
f rings may dilute the holdings of existing shareholders or reduce the market price of our common stock, or both.
Holders of Mid Penn common stock are not entitled to preemptive rights or other protections against dilution.
Also, Mid Penn’s board of directors is authorized to issue one or more classes or series of preferred stock from time to time
without any action on the part of the shareholders. The board of directors also has the power, without shareholder appr
a
oval,
to set the terms of any such classes or series of preferred stock that may be issued, including voting iright
ghts, didi ivide d
nd iright
ghts,
and preferences over common stock with respect to dividends or upon our dissolution, winding up and liquidation and
other terms. If Mid Penn issues prefer
f red stock in the fut
f ur
t
e that has a preference over its common stock with respect to the
payment of dividends or upon our liquidation, dissolution or winding up, or if prefer
f red stock is issued with voting rights
that dilute the voting power of common stock, the rights of holders of Mid Penn’s common stock or the market price of the
common stock could be adversely affected.
MID PENN BANCORP, INC.
29

Pennsyl
s vania Business Cor
C
por
r
ation Law and various anti-takeover provisions under our articles of i
o
ncorpor
r
ation and
bylaws could i
l
mpede t
d
he
t
takeover of M
o
id
M
Penn.
Various Pennsylvania laws affecting business corpor
r
ations may have the effe
f ct of discouraging offers to acquire Mid Penn,
even if the acquisition would be advantageous to shareholders. In addition, Mid Penn has various anti-takeover measures in
place under its articles of incorporation and bylaws, including a supermajority vote requirement for mergers, the staggered
election of Mid Penn’s board of directors, and the absence of cumulative voting. Any one or more of these laws or
measures may impede the takeover of Mid Penn and may prevent its shareholders from taking part in a transaction in
which they could realize a premium over the current market price of its common stock.
Mid Penn’s common stock is not insured by a
b
ny governmental entity.
Although Mid Penn and the Bank are regulated by governmental agencies, Mid Penn common stock is not a deposit
account or other obligation of the Bank or any other bank and, therefor
f
e, is not insured against loss by the FDIC, any other
deposit insurance fund,
f
any other governmental entity or by any other public or private entity. Investment in Mid Penn
common stock is inherently risky f
k
or
f
the reasons described elsewhere in this "Risk Factors" section, in this document, and
our other fil
f ings with the SEC. Mid Penn common stock is also subject to the same market for
f
ces that affe
f ct the price of
common stock in any other publicly traded company. As a result, investors who acquire Mid Penn common stock may lose
some or all of their investment.
General Risk Factors
Mid Penn’s controls a
l
nd procedur
d
es may f
a
ai
f l or be circumvented.
Management maintains Mid Penn’s internal controls, disclosure controls and procedur
d
es, and corporate governance
policies and procedur
d
es, and periodically reviews and updates them. Any system of controls, however well designed and
operated, is based in part on performance by personnel or certain assumptions and can provide only reasonabl
a e, not
absolute, assurances that the objectives of the system are met. Any fai
f lure or circumvention of Mid Penn’s controls and
procedur
d
es or failure to comply with regulations related to controls and procedur
d
es could have a material adverse effec
f
t on
Mid Penn’s business, results of operations, and financial condition.
Mid Penn may not be able to attract and retain skilled personnel.
Mid Penn’s success depends, in large part, on its ability to attract and retain qualifie
f d, key personnel. Competition for the
best personnel in most activities engaged in by Mid Penn can be intense, and Mid Penn may not be able to hire or retain
them. Limitations in the way regulated financial institut
t ions can compensate their officers and employees, including those
requirements contained in Dodd-Frank, may make it more diffi
f cult for regulated financial institutions, including Mid Penn,
to compete with unregulated companies for talent. The unexpected loss of services of one or more of Mid Penn’s key
personnel could have a material adverse impact on Mid Penn’s business because of their skills, knowledge of Mid Penn’s
market, years of industry e
r
xperience, and the difficulty of promptly finding qualifie
f d replacement personnel.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
MID PENN BANCORP, INC.
30

ITEM 1C. CYBERSECURITY
Mid Penn places an emphasis on managing risks effe
f ctively to achieve its business goals and maintain the confid
f ence of its
shareholders. Cybersecurity is one of the company's most critical risks and is an integral part of our Risk Management
program. We are open about
a
our willingness to take risks and regularly review and upda
u
te our risk management policies to
keep up with the ever-changing financial landscape
a
. Our risk committees, made up o
u
f experienced profes
f
sionals, careful
f ly
evaluate the risks associated with our business activities, ensuring that our risk-taking aligns with our overall corporate
goals.
Mid Penn engages a team of external assessors, auditors, and consultants to support our cybersecurity and risk management
effo
f
rts. We seek information and guidance fro
f
m reputable third-party organizations such as CISA, RMA, and FS-ISAC to
aid in making responsible decisions and mitigating risks. We utilize threat detection and prevention technologies to analyze
network traffic and identify a
f
typical behavior that may indicate a potential cyber threat. This proactive appr
a
oach is intended
to enable us to detect threats befor
f
e they can cause harm to our systems or compromise sensitive infor
f
mation. Additionally,
we conduct regular penetration testing and vulnerabi
a lity assessments to identify a
f
nd remedy potential defic
f iencies in our
systems.
Mid Penn protects and monitors its technology environment with industry l
r
eading security tools including next-generation
firewalls with intrus
r
ion prevention services, intrusion detection and response tools, email security gateway, log and event
monitoring software, and an industry-
r
leading antivirus
r
solution. Each system is administered and monitored by members of
our Information Technology and Infor
f
mation Security staff.
f
Real-time alerts received fro
f
m these systems are responded to
by staff a
f
nd worked until the threat is determined to be mitigated. Impactful computer security events would be subject to
the guidance provided in our Incident Response Program, that is tested annually so we are ready to respond if needed.
Mid Penn relies on several reputable service providers who provide systems or support to our technology environment.
Service providers are selected careful
f ly and monitored closely through our Vendor Management program. With routine,
ongoing service provider reviews that exist throughout the relationship with the service provider, and with alerting for
f
notable events for our service providers in place, we can quickly identify p
f
otential threats and mitigate threats with our
service providers as needed.
We have created a robust Infor
f
mation Security Awareness Program to deliver our employees pertinent and timely
educ
d
ational content. Mindful
f
that human error can be a significant factor in cybersecurity incidents, our employees undergo
regular training to stay informed about the latest threats and best practices. This reduc
d
es the risk of inadvertent security
breaches and cultivates a culture of security throughout the organization. Additionally, we regularly conduct social
engineering tests on our employees to keep them sharp a
r
nd alert for
f
threats through email, text messages, and voice calls.
Mid Penn did not experience a material incident to our computer systems or networks in 2024.
Mid Penn's Infor
f
mation Technology and Security management team is responsible for implementing and executing the
company's cybersecurity strategy on a day-to-day basis. This team of cybersecurity experts specializes in managing risks
for fin
f ancial services providers. The Chief Infor
f
mation Security Offi
f cer has 20 years of experience and is accompanied by
an Information Security Offi
f cer with eleven years of experience in the fie
f ld. With more than 15 years of experience in
information technology and network security, the Information Technology Operations Manager is highly skilled in network
security and risk mitigation. Information Technology and Security management hold a monthly meeting to assess the
organization's cybersecurity position and distributes information to the Board of Directors.
The Board of Directors oversees the risk management process, while executive leadership implements risk mitigation and
cybersecurity strategies. The company's cybersecurity strategy is actively overseen and guided by the Board of Directors
through a quarterly subc
u
ommittee meeting with the full Board engaged annually. Executive management provides
cybersecurity and risk management upda
u
tes to the Board through the Risk Committee and the Technology Steering
Committee. Information Technology knowledge is considered a core competency by eight of eleven Board members. They
guide the ful
f l Board in setting cybersecurity objectives, appr
a
oving policies, and allocating resources.
We acknowledge that risk is a natur
t
al part of the fin
f ancial industry.
r
The threat landscape is ever-changing, and with
increasingly sophisticated techniques, threat actors pose a greater risk to Mid Penn and its customers, leaving us vulnerabl
a e
to cyberattacks and information security incidents. However, our commitment is to maintain a careful
f
balance between
innovation and risk mitigation. To achieve this, we have developed a risk appetite that aligns with our strategic goals and
regulatory r
r
equirements. This framework encourages innovation while ensuring our risks are well-understood, measured,
and managed.
MID PENN BANCORP, INC.
31

ITEM 2. PROPERTIES
The Bank owns a building in Harrisburg, Pennsylvania, located at 2407 Park Drive, which serves as the Corporation’s
headquarters. The Bank also owns a building in Millersburg, Pennsylvania, located at 349 Union Street, which serves as
the Bank’s headquarters. Additionally, the Bank owns one building in Halifax
f
, Pennsylvania that serves as an operational
suppor
u
t faci
f
lity and one building in Harrisburg, Pennsylvania that serves as corpor
r
ate administrative and operational
suppor
u
t offices. Administrative space is also leased in Malvern, Pottsville, Lancaster, Clearfield and Chambersburg,
Pennsylvania. As of December 31, 2024, the Bank’s retail office network was comprised of 45 ful
f l-service retail locations.
The Bank owned 26 of those locations and leased 19 locations.
All real estate owned by Mid Penn is free and clear of encumbrances. Mid Penn’s leases expire at various dates through the
year 2039 and generally include options to renew. For additional infor
f
mation regarding the lease commitments, See "Note
7 - Leases", within Item 8, Notes to Consolidated Financial Statements.
ITEM 3. LEGAL PROCEEDINGS
Mid Penn and its subsidiaries are subj
u ect 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 liabi
a lity 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 liabi
a lities and contingencies in connection with such matters. For those matters where it is
probabl
a e that Mid Penn will incur losses and the amounts of the losses can be reasonabl
a y estimated, Mid Penn records an
expense and corresponding liabi
a lity in its consolidated financial statements. To the extent such matters could result in
exposure in excess of that liabi
a lity, the amount of such excess is not currently estimabl
a e. The range of losses for
f
matters
where an exposure is not currently estimabl
a e or considered probable is not believed to be material in the aggregate. This is
based on infor
f
mation currently availabl
a e 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
d
addidi ition, rega d
rdless of hthe ul i
ltimate
outcome of any such l
h l g
eg lal proceedidi g
ng, in
i
qui y
ry or investigigation, any such matter c
l
ould cause
i
Mid Penn t
i
o incur d
addidi itional
expenses, whihi h
ch co luld b
d be sigig inifificant, and pos isiblbly material, to
i
Mid Penn’s res lults of opera itions in any fut
f ur
t
e period.
In d
addidi ition, management does not know of any material proceedidi g
ngs contem lplat d
ed by
by government lal au hthori i
ities against
i
Mid
Penn or any of i
f its properties.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable
MID PENN BANCORP, INC.
32

PART II
ITEM 5. MARKET FOR REGISTRANT
R
’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND
Q
,
ISSUER PURCHASES OF EQUITY SECURITIES
Q
The Corpor
r
ation’s common stock is traded on NASDAQ under the symbol MPB.
Transfer
f
Agent:
g
Computershare, Attn: Shareholder Services, P.O. Box 30170, College Station, TX 77842-3170. Phone:
1-800-368-5948.
Number of Shareholders: As of March 13, 2025, there were appr
a
oximately 5,000 shareholders of record of Mid Penn’s
common stock.
Dividends: Mid Penn’s dividend payout philosophy looks to provide reasonabl
a e quarterly cash retur
t
ns to shareholders
while still retaining suffi
f cient earnings to finance fut
f ur
t
e growth and maintain sound capital levels. The declaration of cash
dividends on Mid Penn’s common stock is at the discretion of its Board of Directors, and any decision to declare a
dividend is based on a number of fact
f
ors, including, but not limited to, earnings, prospects, financial condition, regulatory
r
capital levels, applicable covenants under any credit agreements and other contractua
t
l restrictions, Pennsylvania law,
federal and Pennsylvania bank regulatory l
r
aw, and other fac
f
tors deemed relevant.
Dividend Reinvestment and Stock Purchases: Shareholders of Mid Penn may acquire additional shares of common stock
by reinvesting their cash dividends under the Dividend Reinvestment Plan without paying a brokerage fee. Voluntary c
r
ash
contributions may also be made under the Plan. For additional infor
f
mation about
a
the Plan, contact the Transfer Agent.
Annual Meeting:g The Annual Meeting of the Shareholders of Mid Penn is expected to be held virtua
t
lly at 10:00 a.m. on
Tuesday, May 13, 2025.
Accounting, Auditing and Internal Control Complaints:
g,
g
p
Information on how to report a complaint regarding accounting,
internal accounting controls or auditing matters is availabl
a e at Mid Penn's website: www.midpennbank.com
Purchases of Equity Securities by the Issuer and Affiliated Purchasers:
q
y
y
In 2020, Mid Penn announced the adoption of a
treasury s
r
tock repurchase program ("Repurchase Program") authorizing the repurchase of up t
u
o $15.0 million of Mid
Penn’s outstanding common stock, which represents approximately 3.5% of the issued shares based on Mid Penn’s closing
stock price and shares issued as of March 31, 2022. The Repurchase Program was extended through April 24, 2025 by Mid
Penn’s Board of Directors on April 24, 2024. Under the Repurchase Program, Mid Penn may conduct 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 subj
u ect to market conditions and other factors. There is no guarantee as to the exact number of shares that Mid
Penn may repurchase.
The Repurchase Program may be modified, suspended or terminated at any time, in Mid Penn’s discretion, based upon
u
a
number of fact
f
ors, including liquidity, market conditions, the availabi
a lity of alternative investment opportunities and other
factors Mid Penn deems appr
a
opriate. The Repurchase Program does not obligate Mid Penn to repurchase any shares.
During the year ended December 31, 2024, Mid Penn repurchased 15,500 shares of common stock at an average price of
$20.81 per share. No shares were purchased during the fourth quarter of 2024. As of December 31, 2024, Mid Penn had
repurchased 440,722 shares of common stock at an average price of $22.78 per share under the Program. The Repurchase
Program had appr
a
oximately $5.0 million remaining availabl
a e for
f
repurchase as of December 31, 2024.
Securities Authorized for Issuance under Equity Compensation Plans:
q
y
p
Information regarding the Corpor
r
ation’s equity
compensation plans is included in Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management
and Related Shareholder Matters.
MID PENN BANCORP, INC.
33

Stock Performance Graph
p
As of December 31, 2024, to better align with the Company's direct competitors, the Company has chosen to change the
composition of its peer group for the performance graph below. The total shareholder retur
t
n is based on a $100 investment
on December 31, 2019.
Total Shareholder's Returns | 5 Year Return
Mid Penn Bancorp, Inc.
Current Peers (1)
Prior Peers (2)
KBW NASDAQ Bank Index Return
12/31/19
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
60
80
100
120
140
Index
e
12/31/2019
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
Mid Penn Bancorp, Inc.
100.00
78.79
117.84
114.38
96.05
117.89
Current Peers (1)
100.00
79.03
112.09
106.63
104.92
118.63
Prior Peers (2)
100.00
78.92
118.12
110.33
112.74
131.54
KBW NASDAQ Bank
Index Retur
t
n
100.00
86.37
116.64
88.97
84.71
112.44
(1) Current Peers includes AROW, CCNE, CHMG, CNOB, CZFS, CZNC, FCF, FFIC, FISI, FRBA, LNKB, ORRF, PFIS, PGC, SHBI, STBA, TMP,
UNTY and UVSP; Excludes FLIC due
d
to pending merger with CNOB
(2) Prior Peers includes AMAL, CCNE, CHCO, CNOB, FCF, FFIC, FISI, KRNY, MCB, NFBK, ORRF, PGC, STBA, TBBK, TMP, TRST, UVSP and
WASH; Excludes CATC due
d
to completed merger with EBC
Note: Peer group returns refle
f ct average total return of respective peer group
In accordance with the rul
r es of the SEC, this section, captioned "Stock Performance Graph," is not incorporated by
reference into any of our future filings made under the Securities Exchange Act of 1934 or the Securities Act of 1933. The
Stock Performance Graph, including its accompanying tabl
a e and footnotes, is not deemed to be soliciting material or to be
filed under the Exchange Act or the Securities Act.
ITEM 6. [RESERVED]
[
]
MID PENN BANCORP, INC.
34

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERAT
R
IONS
SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
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 constitut
t e for
f
ward looking statements within the meaning of the Private Securities Litigation Refor
f
m 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 for
f
ward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations,
intentions, proje
o ctions and statements of our beliefs c
f
oncerning future events, business plans, objectives, and expected
operating results, including afte
f r 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, for
f
ecast, indicate or imply future
results, performance or achievements, and are typically identifie
f d 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 subj
u ect to a number of known
and unknown risks and uncertainties that are subj
u ect to change based on fact
f
ors which are, in many instances, beyond our
control. Actual results, performance or achievements could diffe
f r materially from those contemplated, expressed, or
implied by the forward-looking statements.
The fol
f lowing factors, among others, could cause our financial performance to differ materially from that expressed in such
forward-looking statements:
•
Mid Penn’s abi
a lity to efficiently integrate acquisitions, including 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;
•
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;
•
the effe
f cts of fut
f ur
t
e economic conditions on Mid Penn, the Bank, our nonbank subs
u
idiaries, and our markets and
customers;
•
governmental monetary and fis
f cal policies, as well as legislative and regulatory c
r
hanges;
•
fut
f ut re actions or inactions of the United States government, including a fai
f lure to increase the government debt
limit or a prolonged shutdown of the federal government;
•
business or economic disrupt
r
ion fro
f
m 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 effe
f cts of competition from other commercial banks, thrifts
f , mortgage banking firms, consumer finance
companies, credit unions, securities brokerage firms, insurance companies, money market and other mutua
t
l funds
f
and other financial institutions operating in our market area and elsewhere, including institutions operating locally,
regionally, nationally and internationally, together with such competitors offe
f ring 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 subj
u ect, or
imposition of any additional taxes on the capital stock of Mid Penn or the Bank;
•
impacts of the capi
a tal and liquidity requirements imposed by bank regulatory a
r
gencies;
•
the effe
f ct of changes in accounting policies and practices, as may be adopted by regulatory a
r
gencies, as well as the
Publ
u ic Company Accounting Oversight Board, Financial Accounting Standards Board, the SEC, and other
accounting and reporting rule making authorities;
•
the costs and effe
f cts of litigation and of unexpected or adverse outcomes in such litigation, including litigation
related to the Merger;
•
changes in technology;
•
our ability to implement business strategies, including our acquisition strategy;
•
our ability to successful
f ly expand our franchise, including through acquisitions or establ
a ishing new offices at
favorable prices;
•
our ability to successful
f ly integrate any banks, companies, offices, assets, liabi
a lities, 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 fut
f ur
t
e impairment charges and flu
f ctua
t
tions in the fai
f r values of
reporting units or of assets in the event projected financial results are not achieved within expected time frames;
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
35

•
our ability to attract and retain qualifie
f d management and personnel;
•
results of regulatory e
r
xamination and supe
u
rvision processes;
•
the ability to obtain regulatory a
r
ppr
a
ovals and satisfy other closing conditions to the Merger, including approval by
the shareholders of Mid Penn and William Penn;
•
the possibility of increased scrut
r iny by, and/or additional regulatory r
r
equirements of, governmental authorities as a
result of the Merger;
•
potential exposure to unknown or contingent risks and liabi
a lities we have acquired, or may acquire, or target for
f
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 liabi
a lities;
•
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 intellectua
t
l property rights;
•
volatility in the securities markets;
•
disrupt
u ions due to flooding, severe weather, or other natur
t
al disasters or acts of God;
•
acts of war, terrorism, or global military conflic
f
t;
•
supply chain disrupt
r
ion; and
•
the risk factors described in Item 1A of this Annual Report.
All written or oral for
f
ward-looking statements attributable to Mid Penn are expressly qualifie
f d in their entirety by these
cautionary factors.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations analyzes the major elements
of Mid Penn’s Consolidated Financial Statements fro
f
m the view of management and should be read in conjunction with the
Consolidated Financial Statements of the Corporation and Notes thereto and other detailed infor
f
mation appearing
elsewhere in this Annual Report on Form 10-K. The comparabi
a lity of the results of operations for the years ended 2024 and
2023, compared to 2022, in general, have been materially impacted by the Brunswick Acquisition, which closed on May
19, 2023.
Mid Penn is not aware of any current trends, events, uncertainties or any current recommendations by the regulatory
r
authorities which, if they were to be implemented, would have a material effe
f ct on Mid Penn’s or the Bank’s liquidity,
capital resources, or operations.
Executive Overview
Mid Penn is a financial holding company incorpor
r
ated in August 1991 in the Commonwealth of Pennsylvania.
Mid Penn generates the majority of its revenues through net interest income, or the diffe
f rence 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 fully taxabl
a e-equivalent basis ("FTE")
net interest income as a percentage of average interest-earning assets. The Corporation also generates revenue through fees
earned on the various services and products offe
f red to its customers and through gains on sales of assets, such as loans,
investments and properties. Offs
f etting these revenue sources are provisions for credit losses, non-interest expenses and
income taxes.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
36

The fol
f lowing tabl
a e presents a summary of the Corpor
r
ation's earnings and selected performance ratios:
December 31,
2024
2023
2022
Net Income
$
49,437
$
37,397
$
54,806
Diluted EPS
$
2.90
$
2.29
$
3.44
Dividends Declared
$
0.80
$
0.80
$
0.80
Return on average assets (2)
0.91 %
0.77 %
1.22 %
Return on average equity (2)
8.61 %
7.16 %
10.98 %
Net interest margin (1)
3.11 %
3.26 %
3.59 %
Non-performing assets to total assets
0.41 %
0.27 %
0.21 %
Net charge-off t
f
o average loans
0.019 %
0.009 %
(0.002)%
(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
During the second quarter of 2023, Mid Penn completed the Brunswick Acquisition, which added total assets of $390.7
million comprised primarily of $324.5 million of loans. This transaction resulted in the addition of 5 branches in central
New Jersey. Mid Penn issued 849,510 shares of its common stock as well as a net cash payment to Bruns
r
wick shareholders
of $27.6 million, for total consideration of $45.7 million for all outstanding stock and the cancellation of options of
Bruns
r
wick.
Summary of Financial Results
y
•
Net Inc
I
ome Per Share - Mid Penn’s net income availabl
a e to common shareholders ("earnings") for the year ended
December 31, 2024 was $49.4 million or $2.90 per common share basic and diluted, compared to earnings of
$37.4 million or $2.29 per common share basic and diluted for
f
the year ended December 31, 2023. The results for
f
the year ended December 31, 2024 were favorably impacted by loan growth, and interest income growth.
•
Net Int
I erest Inc
I
ome
◦
Net Int
I erest Mar
M
gi
r n
g
- For the year ended December 31, 2024, Mid Penn’s FTE net interest margin was
3.11% versus 3.26% for the year ended December 31, 2023. The Federal Reserve’s Federal Open Market
Committee ("FOMC") decreased rates three times dur
d
ing 2024. The yield on interest-earning assets
increased 44 basis point(s) ("bp") for
f
the year ended December 31, 2024 compared to the year ended
December 31, 2023 and the rate on interest-bearing liabi
a lities increased 70 bp for the year ended
December 31, 2024 compared to the year ended December 31, 2023.
◦
Loan Growth - Total l
l loans, net of unearned i
d income, as of December 31, 2024 were $4.4 bibilli
llion
compar d
ed to $4.3 bibillllion as of December 31, 2023, a
i
n increase of $190.3
i
millllion, or 4.5%. The loan
grow hth occurred p irima irilyly
i
wi hthin
i
Mid Penn’s commercial r
l
eal estate loan portf lol
f io
T
.
he mix of
commercial real estate and commercial portfol
f ios in relation to the total change in the loan portfol
f io
increased 111.1% and 15.9%, respectively fro
f
m December 31, 2023 to December 31, 2024. Non-owner
occupi
u ed offi
f ce commercial real estate exposure represents 28.2% of total loan balances and is primarily
limited to suburba
r
n offices.
◦
Depos
e
it Growth
p
- Total deposits increased $343.7 million, or 7.9%, fro
f
m $4.3 billion at December 31,
2023, to $4.7 billion at December 31, 2024.
•
Asset Qualityt
Q
y - ACL at December 31, 2024 was $35.5 million, or 0.80% of total loans, as compared to $34.2
million, or 0.80% of total loans at December 31, 2023.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
37

◦
Net Char
C
ge
r
-offs
o
/R
s
ecoveries
g
ff
- Mid Penn had net loan charge-offs of $817 thousand and net loan charge-
offs
f
of $332 thousand for
f
the years ended December 31, 2024 and 2023, respectively.
◦
Non-pe
-
rfor
f
ming assets
p
f
g
- Total non-performing assets were $22.7 million at December 31, 2024, an
increase compared to non-performing assets of $14.5 million at December 31, 2023. The increase was
partially a result of the addition of two commercial loans with a combined balance of $3.0 million, and
two commercial real estate loans with a combined balance of $2.3 million being placed on nonaccrua
r
l in
the four
f
th quarter of 2024.
◦
Provision/Be
/
nefi
e t for
f
credit losses - Loans
f
f
- The provision for
f
credit losses - loans was $2.1 million for
f
the year ended December 31, 2024 compared to $3.3 million for
f
the year ended December 31, 2023. The
decrease in provision for the year ended December 31, 2024, is primarily due to a decrease in loss fact
f
ors
across most portfol
f ios. Prior to 2023, ACL and related provision are presented in accordance with the
previous accounting guidance using the incurred loss method. The PCL for the year ended December 31,
2023 includes an initial provision for
f
credit losses on non-PCD loans acquired in the Bruns
r
wick
Acquisition of $2.0 million.
•
Noninterest Inc
I
ome - Noninterest income totaled $22.5 million for
f
the year ended December 31, 2024, a $2.5
million, or 12.4%, increase compared to the year ended December 31, 2023. The increase was primarily
attributable to a $2.2 million increase in other miscellaneous income, driven by increases in Bank-owned lifef
insurance benefit
f s received, and a $1.1 million increase in mortgage banking income, partially offs
f et by a $379
thousand decrease in fid
f uc
d
iary and wealth management and a $314 thousand decrease in mortgage hedging.
•
Noninterest Exp
E
ense
p
- Noninterest expense totaled $117.6 million, a decrease of $972 thousand, or 0.8%,
compared to noninterest expense of $118.6 million for the year ended December 31, 2023. The decrease was
primarily driven by a $5.0 million decrease in merger and acquisition expenses and a $3.0 million decrease in
post-acquisition restruc
r
turing expenses, partially offs
f et by a $4.8 million increase in salaries and benefits expense,
driven by year-end employee bonus incentives, increases in employee salaries, and increased costs of employee
medical benefit
f s, a $1.4 million increase in legal and professional fees
f
, and a $1.4 million increase in softw
f
are
licensing and utilization expense.
•
Borrowings paid dow
d
ns
g p
- During 2024, Mid Penn paid off $35.3 million of long-term debt.
•
Share Repurchases
p
- Mid Penn repurchased 15,500 shares during 2024 at an average price per share of $20.81
under its share repurchase program.
•
Business Com
C
binations
◦
On July 31, 2024, Mid Penn acquired the insurance business and related accounts of a full-service
employee benefit
f s fir
f m that serves mid to large employers across central and eastern Pennsylvania,
northern Maryl
r and, and northern Virginia, for a purchase price of $2.0 million at closing and an
additional $800 thousand potentially payabl
a e pursuant to a three year earnout.
◦
On May 19, 2023, Mid Penn completed its acquisition of Brun
r
swick through the merger of Brunswick
with and into Mid Penn with Mid Penn being the surviving corporation. In connection with this
acquisition, Bruns
r
wick Bank, a wholly-owned subs
u
idiary of Bruns
r
wick, merged with and into Mid Penn
Bank, a wholly-owned subs
u
idiary of Mid Penn.
Critical Accounting Estimates
g
Mid Penn’s Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in
the United States ("GAAP") and confor
f
m to general practices within the banking industry.
r
Application of certain principles
involves significant judgments and estimates by management that have a material impact on the carrying value of certain
assets and liabi
a lities. The judgments and estimates used in appl
a
ying these principles are based on historical experiences and
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
38

other fact
f
ors which are believed to be reasonabl
a e under the circumstances. Because of the natur
t
e of the judgments and
estimates that have been made, actual results could diffe
f r fro
f
m these judgments and estimates, which could have a material
impact on the carrying values of assets and liabi
a lities and the reported results of operations.
Management of the Corpor
r
ation considers the accounting judgments relating to the allowance for
f
credit losses and
goodwill impairment to be the accounting area that requires the most subj
u ective and complex judgments.
Allowance for
f
Credit Losses
In accordance with CECL, the ACL, which includes both the ACL - loans and the ACL for OBS credit exposures, is
calculated with the objective of maintaining a reserve for
f
current expected credit losses over the remaining expected life o
f
f
the portfol
f io. Management's determination of the appropriateness of the reserve is based on continuously monitoring and
evaluating the loan portfol
f io, lending-related commitments, current as well as forecasted economic factors, and other
relevant factors. The ACL - loans is an estimate of expected losses inherent within Mid Penn's existing loan portfol
f io.
The loan loss estimation process involves procedur
d
es to appropriately consider the unique characteristics of Mid Penn’s
loan portfol
f io segments. When computing allowance levels, credit loss assumptions are estimated using a model that
categorizes loan pools based on loss history a
r
nd other credit trends and risk characteristics, including current conditions
and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts about the fut
f ur
t
e. Evaluations of the portfol
f io and individual credits are inherently
subj
u ective, as they require estimates, assumptions and judgments as to the fact
f
s 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 fut
f ur
t
e periods, evaluations of the overall loan portfol
f io, in light of the fact
f
ors and
forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.
Mid Penn estimates the ACL using relevant availabl
a e infor
f
mation, from internal and external sources, relating to past
events, current conditions and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts. 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 fac
f
tors
affe
f cting Mid Penn as a whole, as well as specific loans. Factors considered include the fol
f lowing: lending process,
concentrations of credit, and credit quality. 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 reasonabl
a e and
suppor
u
tabl
a e for
f
ecasts. As such, the calculation of ACL is inherently subj
u ective and requires management to exercise
significant judgment. The CECL estimate is highly sensitive to the economic forecasts used to develop the estimate.
While management uses the best infor
f
mation known to it in order to make ACL valuations, adjustments to the ACL may be
necessary based on changes in economic and other conditions, changes in the composition of the loan portfol
f io, or changes
in accounting guidance. In times of economic slowdown, either local, regional or national, the risk inherent in the loan
portfol
f io could increase resulting in the need for additional provisions to the ACL in future periods. An increase could also
be necessitated by an increase in the size of the loan portfol
f io or in any of its components even though the credit quality of
the overall portfol
f io may be improving.
For fur
f
ther discussion of the methodology used in the determination of the ACL, refer to "Note 1, Summary of Significant
Accounting Policies", "Note 3 - Investment Securities", "Note 4 - Loans and Allowance for Credit Losses - Loans" and
"Note 18 - Commitments and Contingencies" to the Consolidated Financial Statements. To the extent actual outcomes
differ fro
f
m management estimates, additional PCL may be required that would adversely impact earnings in future periods.
The allowance for
f
credit losses - Loans was $35.5 million as of December 31, 2024, an increase of $1.3 million, or 3.9%,
compared to $34.2 million as of December 31, 2023. The increase was primarily the result of an increase in the reserve for
f
individually analyzed loans dur
d
ing the fourth quarter of 2024.
Goodwill
Mid Penn evaluates goodwill annually for impairment unless events occur which indicate that impairment is possible, a
triggering event. At December 31, 2024, Mid Penn had goodwill of $128.2 million and Mid Penn's stock continues to trade
below book value.
Our annual impairment test was conducted dur
d
ing the fourth quarter of 2024.
Goodwill is calculated as a purchase
premium using the market participant and peer group c
u
ontrol premium appr
a
oach. Additional fact
f
ors considered include
actua
t
l earnings in relation to for
f
ecasted earnings, liquidity levels, changes in deposit balances, and credit quality, among
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
39

others. No goodwill impairment has been recorded for 2024. Management will continue to monitor internal metrics and
macroeconomic trends to determine if there is likelihood of goodwill impairment.
Refer to Note 1 - Summary of Significant Accounting Policies and Note 6 - Goodwill and Intangible Assets for fur
f
ther
details on the Company's goodwill.
Results of Operations
p
Net Interest Income
Net interest income, Mid Penn's primary source of earnings, represents the difference between interest income received on
loans, investments, and overnight funds, and interest expense paid on deposits and short- and long-term borrowings. Net
interest income is affe
f cted by changes in interest rates and changes in average balances (volume) in the various interest-
sensitive assets and liabi
a lities. Interest and average rates in the tabl
a e below are presented on a ful
f ly taxabl
a e-equivalent basis
("FTE"). Tax-equivalent adju
d stments were calculated using a statutory corporate tax rate of 21% for the years ended
December 31, 2024, 2023 and 2022. For purpos
r
es of calculating loan yields, average loan balances include non-accrua
r
l
loans. Loan fees of $4.8 million, $4.6 million and $8.4 million are included with loan interest income in the fol
f lowing tabl
a e
for the years ended December 31, 2024, 2023, and 2022, respectively.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
40

The fol
f lowing tabl
a e includes average balances, effec
f
tive interest differential and interest yields for the years ended
December 31:
erage Balances, Income and Interest Rates
2024
2023
2022
(Dollars in thousands)s
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate
Average
Balance
Interest
Yield/
Rate
ASSETS:
Interest Bearing Balances
$
30,576
$
1,127
3.69%
$
24,270
$
361
1.49%
$
26,633
$
69
0.26%
Investment Securities:
Taxabl
a e
543,157
15,254
2.81
544,896
15,141
2.78
500,156
11,663
2.33
Tax-Exempt
73,834
1,464
1.98
78,163
1,540
2.49
78,039
1,497
2.43
Total Investment Securities
616,991
16,718
2.71
623,059
16,681
2.68
578,195
13,160
2.34
Federal Funds Sold
36,436
1,928
5.29
7,161
373
5.21
311,989
1,826
0.59
Loans, net of unearned income
4,373,922
265,522
6.07
3,868,307
218,060
5.65
3,217,282
150,256
4.68
Restricted Investment in Bank Stocks
14,155
1,288
9.10
11,121
864
7.77
6,045
289
4.78
Total Interest-earning Assets
5,072,080
286,583
5.65
4,533,918
236,339
5.21
4,140,144
165,600
4.02
Cash and Due from Banks
39,995
49,503
63,608
Other Assets
300,904
299,666
272,422
Total Assets
$5,412,979
$4,883,087
$4,476,174
LIABILITIES & SHAREHOLDERS' EQUITY:
Interest-bearing Demand
$1,001,813
$
19,001
1.90%
$ 950,326
$
13,893
1.46%
$1,051,605
$
3,847
0.37%
Money Market
913,311
26,580
2.91
926,034
21,424
2.31
1,040,762
5,277
0.51
Savings
275,692
244
0.09
312,053
230
0.07
355,229
193
0.05
Time
1,541,654
70,495
4.57
1,116,552
43,749
3.92
524,944
4,827
0.92
Total Interest-bearing Deposits
3,732,470
116,320
3.12
3,304,965
79,296
2.40
2,972,540
14,144
0.48
Short-term borrowings
190,885
10,575
5.54
107,323
7,087
6.60
11,914
441
3.70
Long-term debt
27,937
1,321
4.73
45,304
975
2.15
23,344
352
1.51
Subor
u
dinated debt and trus
r
t preferred securities
46,045
1,696
3.68
49,328
2,008
4.07
70,583
2,830
4.01
Total Interest-bearing Liabi
a lities
3,997,337
129,912
3.25
3,506,920
89,366
2.55
3,078,381
17,767
0.58
Noninterest-bearing Demand
780,538
800,582
848,991
Other Liabi
a lities
62,820
53,530
49,864
Shareholders' Equity
572,284
522,055
498,938
Total Liabi
a lities & Shareholders' Equity
$5,412,979
$4,883,087
$4,476,174
Net Interest Income
$
156,671
$ 146,973
$ 147,833
Taxabl
a e Equivalent Adju
d stment (1)
1,018
811
778
Net Interest Income (taxabl
a e-equivalent basis)
$
157,689
$ 147,784
$ 148,611
Total Yield on Earning Assets
5.65%
5.21%
4.02%
Rate on Suppor
u
ting Liabi
a lities
3.25
2.55
0.58
Average Interest Spread
2.40
2.66
3.44
Net Interest Margin (1)
3.11
3.26
3.59
(1)
Presented on a ful
f ly taxabl
a e-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
41

The volume analysis of changes in net interest income as of December 31 are as follows:
Years Ended
December 31, 2024 vs. December 31, 2023
Years ended
December 31, 2023 vs. December 31, 2022
Increase (decrease)
Increase (decrease)
(Dollars in thousands)s
Volume
Rate
Net
Volume
Rate
Net
INTEREST INCOME:
Interest Bearing Balances
$
94
$
672
$
766
$
(6) $
298
$
292
Investment Securities:
Taxabl
a e
(48)
161
113
1,042
2,436
3,478
Tax-Exempt
(108)
32
(76)
3
40
43
Total Investment Securities
(156)
193
37
1,045
2,476
3,521
Federal Funds Sold
1,525
30
1,555
(1,798)
345
(1,453)
Loans, net of unearned income
28,567
18,895
47,462
30,468
37,336
67,804
Restricted Investment Bank Stocks
236
188
424
243
332
575
Total Interest Income
30,266
19,978
50,244
29,952
40,787
70,739
INTEREST EXPENSE:
Interest Bearing Deposits:
Interest Bearing Demand
752
4,356
5,108
(375)
10,421
10,046
Money Market
(294)
5,450
5,156
(585)
16,732
16,147
Savings
(25)
39
14
(22)
59
37
Time
16,664
10,082
26,746
5,443
33,479
38,922
Total Interest-Bearing
Deposits
17,097
19,927
37,024
4,461
60,691
65,152
Short-term Borrowings
4,629
(1,141)
3,488
6,300
346
6,646
Long-term Debt
(373)
719
346
332
291
623
Subor
u
dinated Debt
(134)
(178)
(312)
(852)
30
(822)
Total Interest Expense
21,219
19,327
40,546
10,241
61,358
71,599
NET INTEREST INCOME
$
9,047
$
651
$
9,698
$
19,711
$
(20,571) $
(860)
(1) The effe
f ct of changing volume and rate, which cannot be segregated, has been allocated entirely to the rate column. Tax-exempt income is
shown on a tax equivalent basis using a statutory corporate tax rate of 21% for the years ended December 31, 2024, 2023 and 2022.
For the year ended December 31, 2024, Mid Penn’s FTE net interest margin was 3.11% versus 3.26% for the year ended
December 31, 2023 and 3.59% for the year ended December 31, 2022. During 2024, FTE net interest income increased
$9.7 million, or 6.6%, compared to 2023. Interest income increased $30.3 million as the result of a $538.2 million, or
11.9%, increase in average interest-earning assets in 2024 compared to 2023, and increased $20.0 million as the result of a
44 bp increase in the yield on interest-earning assets in 2024 compared to 2023. The decrease to net interest margin was
primarily a result of an increase in fundi
f
ng costs and growth in average interest-bearing liabi
a lities, partially offs
f et by higher
yields on interest-earning assets and growth in average interest-earning assets.
Average total loans, net, increased $505.6 million, or 13.1%, contributing $28.6 million to the increase in interest income.
The yield on average total loans, net, increased from 5.65% for 2023 to 6.07% for 2024. The increase in the yield was
primarily the result of the higher interest rate environment dur
d
ing 2024.
Total average federal funds
f
sold increased $29.3 million, contributing $1.5 million to the increase in FTE interest income,
and the average yield on fed
f
eral funds sold increased 8 bps, contributing $30 thousand to the increase in FTE interest
income.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
42

Interest expense for
f
2024 increased by $40.5 million or 45.4% when compared to 2023. The cost of interest-bearing
liabi
a lities increased to 3.25% in 2024 from 2.55% in 2023 and 0.58% in 2022. The rate on total interest-bearing deposits
increased to 3.12% in 2024 from 2.40% in 2023 and 0.48% in 2022. The increase in the rate was primarily a result of
deposit growth and a shift i
f
n the mix of deposits fro
f
m noninterest-bearing to higher yielding demand, money market and
time deposits. Mid Penn continued to offer higher rates to both retain and attract deposits. In addition, average short-term
borrowings of $190.9 million were used to help fund
f
loan growth, contributing to the $3.5 million increase in interest
expense on short-term borrowings for the year ended December 31, 2024 as compared to 2023.
Although the effective interest rate impact on interest-earning assets and fundi
f
ng sources can be reasonabl
a y 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 produc
d
ts in the Bank's portfol
f ios, may significantly change the estimates used in Mid Penn’s
asset and liabi
a lity 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.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
43

Provision for Credit Losses - Loans
The provision for credit losses on loans was $2.1 million for
f
the year ended December 31, 2024, a decrease of $1.2 million
or 34.9% compared to a provision for credit losses of $3.3 million for the year ended December 31, 2023. The provision for
credit losses on loans for the year ended December 31, 2023 decreased $1.0 million, or 23.4%, fro
f
m the $4.3 million
provision for credit losses on loans for the year ended December 31, 2022. The decrease in provision for the year ended
December 31, 2024 was primarily due to a decrease in loss fact
f
ors across most portfol
f ios. The benefit
f
for credit losses on
off-b
f
alance sheet credit exposures was $628 thousand for
f
the year ended December 31, 2024, compared to a provision of
$404 thousand or the year ended December 31, 2023. Prior to 2023, ACL and related provision are presented in accordance
with the previous accounting guidance using the incurred loss method.
For the year ended December 31, 2024, Mid Penn had net charge-offs of $817 thousand compared to net charge-offs of
$332 thousand for
f
the year ended December 31, 2023, and net recoveries of $60 thousand for
f
the year ended December 31,
2022 . A summary o
r
f charge-offs
f
and recoveries of loans and the provision for loan losses is shown in the tabl
a e below.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
44

The fol
f lowing tabl
a e represents the analysis of the allowance for
f
credit losses:
Years ended December 31,
(In T
I
hous
T
ands)s
2024
2023
2022
Balance, beginning of year
$
34,187
$
18,957
$
14,597
Loans charged off:
f
Commercial real estate
CRE Nonowner Occupied
—
—
7
CRE Owner Occupi
u ed
—
16
—
Total Commercial real estate
—
16
7
Commercial and industrial
819
238
1
Residential mortgage
1-4 Family 1st Lien
7
13
25
1-4 Family Rental
2
—
—
HELOC and Junior Liens
21
—
1
Total residential mortgage
30
13
26
Consumer
52
135
97
Total loans charged off
901
402
131
Recoveries on loans previously charged off:
Commercial real estate
CRE Nonowner Occupied
2
—
—
CRE Owner Occupi
u ed
4
—
128
Total commercial real estate
6
—
128
Commercial and industrial
1
—
13
Construc
r
tion
Other Construction
—
—
24
Total construc
r
tion
—
—
24
Residential mortgage
1-4 Family 1st Lien
16
7
2
1-4 Family Rental
22
31
—
HELOC and Junior Liens
—
—
2
Total residential mortgage
38
38
4
Consumer
39
32
22
Total loans recovered
84
70
191
Net charge-offs
f
(recoveries)
817
332
(60)
Provision for loan losses
2,144
3,295
4,300
Impact from the adoption of CECL
—
11,931
—
Purchase Credit Deteriorated loans
—
336
—
Balance, end of year
$
35,514
$
34,187
$
18,957
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
45

The fol
f lowing tabl
a e represents the ratio of net charge-offs
f
(recoveries) to total average loans outstanding:
(In thousands)s
As of December 31, 2024
Net charge-offs
f
(Recoveries)
Average Loans
outstanding
Ratio of net charge-offs
(recoveries) to total
average loans outstanding
Commercial real estate
CRE Nonowner Occupied
$
(2) $
1,204,473
0.000 %
CRE Owner Occupi
u ed
(4)
624,542
(0.001)
Multifamily
—
384,374
0.000
Farmland
—
217,667
0.000
Total Commercial Real Estate
(6)
2,431,056
0.000
Commercial and industrial
818
695,730
0.118
Construc
r
tion
Residential Construc
r
tion
—
101,234
0.000
Other Construction
—
349,481
0.000
Total Construction
—
450,715
0.000
Residential mortgage
1-4 Family 1st Lien
(9)
323,524
(0.003)
1-4 Family Rental
(20)
344,261
(0.006)
HELOC and Junior Liens
21
136,634
0.015
Total Residential Mortgage
(8)
804,419
(0.001)
Consumer
13
7,276
0.179
Total Loans
$
817
$
4,389,196
0.019 %
As of December 31, 2023
Commercial real estate
CRE Nonowner Occupied
$
—
$
1,111,413
0.000 %
CRE Owner Occupi
u ed
16
586,357
0.003
Multifamily
—
261,289
0.000
Farmland
—
199,452
0.000
Total Commercial Real Estate
16
2,158,511
0.001
Commercial and industrial
238
641,264
0.037
Construc
r
tion
Residential Construc
r
tion
—
100,851
0.000
Other Construction
—
378,962
0.000
Total Construction
—
479,813
0.000
Residential mortgage
1-4 Family 1st Lien
6
342,485
0.002
1-4 Family Rental
(31)
253,606
(0.012)
HELOC and Junior Liens
—
128,912
0.000
Total Residential Mortgage
(25)
725,003
(0.003)
Consumer
103
6,486
1.588
Total Loans
$
332
$
4,011,077
0.008 %
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
46

As of December 31, 2022
Commercial real estate
CRE Nonowner Occupied
$
7
$
961,766
0.001 %
CRE Owner Occupi
u ed
(128)
479,599
(0.027)
Multifamily
—
188,040
0.000
Farmland
—
158,844
0.000
Total Commercial Real Estate
(121)
1,788,249
(0.007)
Commercial and industrial
(12)
572,291
(0.002)
Construc
r
tion
Residential Construc
r
tion
—
59,170
0.000
Other Construction
(24)
340,751
(0.007)
Total Construction
(24)
399,921
(0.006)
Residential mortgage
1-4 Family 1st Lien
23
285,331
0.008
1-4 Family Rental
—
114,992
0.000
HELOC and Junior Liens
(1)
114,610
(0.001)
Total Residential Mortgage
22
514,933
0.004
Consumer
75
9,141
0.821
Total Loans
$
(60) $
3,284,535
(0.002) %
Noninterest Income
Noninterest income and variance analysis as of December 31:
Years Ended December 31,
(Dollars in thousands)s
2024
2023
2022
$ Variance
2024 vs. 2023
% Variance
2024 vs. 2023
Income from fid
f uc
d
iary and wealth
management activities
$
4,680
$
5,059
$
5,071
$
(379)
(7.5)%
ATM debit card interchange income
3,851
4,019
4,362
(168)
(4.2)
Service charges on deposits
2,176
1,943
2,078
233
12.0
Mortgage banking income
2,476
1,353
1,607
1,123
83.0
Mortgage hedging income
10
324
1,471
(314)
(96.9)
Net gain on sales of SBA loans
347
571
262
(224)
(39.2)
Earnings from cash surrender value of
life i
f
nsurance
1,141
1,112
1,013
29
2.6
Other income
7,812
5,627
7,793
2,185
38.8
Total Noninterest Income
$
22,493
$
20,008
$
23,657
$
2,485
12.4 %
For the year ended December 31, 2024, noninterest income totaled $22.5 million, an increase of $2.5 million or 12.4%,
compared to noninterest income of $20.0 million for
f
the year ended December 31, 2023. Income from mortgage banking,
service charges on deposits, earnings from cash surrender value of life i
f
nsurance, and other income all increased compared
to the prior year.
Mortgage ba ki
nki g
ng income increased $
d
1.1 million for the year ended December 31, 2024 compar d
ed to hth
y
e year e d
nded
December 31, 2023 M
.
ortgage loan originations and secondary-market loan sales and gains increased during 2024 as a
result of decreases in interest rates. Mortgage hedging income was $10 thousand for
f
the year ended December 31, 2024
compared to $324 thousand for
f
the same period in 2023.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
47

Other income increased $2.2 million for the year ended December 31, 2024 compared to hth
y
e year ended D
d
ecember 31,
2023. The increase in noninterest income is primarily driven by a $2.2 million increase in other miscellaneous noninterest
income, driven by increases in Bank-owned life i
f
nsurance benefits received.
For details on the variances of noninterest income for
f
the year ended D
d
ecember 31, 2023 compared to the year ended
December 31, 2022 refer to the "Noninterest Income" section of the Management's Discussion and Analysis in the
Corporation's Annual Report on Form 10-K for
f
the fis
f cal year ended December 31, 2023.
Noninterest expense and variance analysis as of December 31:
Years Ended December 31,
(In Thousands)s
2024
2023
2022
$ Variance
2024 vs. 2023
% Variance
2024 vs. 2023
Salaries and employee benefit
f s
$
64,098
$
59,345
$
52,601
$
4,753
8.0 %
Software licensing and utilization
9,300
7,927
7,524
1,373
17.3
Occupa
u
ncy expense, net
7,571
7,349
6,900
222
3.0
Equipment expense
4,928
5,121
4,493
(193)
(3.8)
Shares tax
2,350
2,713
2,786
(363)
(13.4)
Legal and profes
f
sional fee
f
s
4,306
2,945
2,761
1,361
46.2
ATM/card processing
2,284
2,108
2,139
176
8.3
Intangible amortization
1,784
1,780
2,012
4
0.2
FDIC assessment
4,170
3,500
1,594
670
19.1
(Gain) loss on sale or write-down of
foreclosed assets, net
80
(144)
(133)
224
N/M
Merger and acquisition expense
545
5,544
294
(4,999)
(90.2)
Post-acquisition restructur
t
ing expense
—
2,952
329
(2,952)
(100.0)
Other expenses
16,200
17,448
16,139
(1,248)
(7.2)
Total Noninterest Expense
$
117,616
$
118,588
$
99,439
$
(972)
(0.8)%
N/M - Not Meaningful
f
For the year ended December 31, 2024, noninterest expense totaled $117.6 million, a decrease of $1.0 million, or 0.8%,
compared to noninterest expense of $118.6 million for
f
the year ended December 31, 2023. The decrease was primarily
driven by a $5.0 million decrease in merger and acquisition expenses, and a $3.0 million decrease in post-acquisition
restructur
t
ing, partially offset by a $4.8 million increase in salaries and benefit
f s expense, driven by year-end employee
bonus incentives, increases in employee salaries, and increased costs of employee medical benefits, a $1.4 million increase
in legal and profes
f
sional fee
f
s, and a $1.4 million increase in softw
f
are licensing and utilization.
For details on the variances of noninterest expense for
f
the year ended D
d
ecember 31, 2023 compared to the year ended
December 31, 2022 refer to the "Noninterest Expense" section of the Management's Discussion and Analysis in the
Corporation's Annual Report on Form 10-K for
f
the fis
f cal year ended December 31, 2023.
Income Taxes
h
The pro ivi ision fo i
r income taxes was $10.6
il
millilion during the year ended D
d
ecember 31, 2024, a
i
n increase of $3.3
i
millllion
compar d
ed to $7.3
i
milli
llion for the same pe iri d
od in 2023. The pr
i
ovi ision fo i
r income taxes for the year ended D
d
ecember 31,
2024 reflflects an effective combibined F d
eder lal and state tax rat (
e ("ETR )") of 17.6%, compared to an ETR of 16.3% for the
year ended D
d
ecember 31, 2023 T
.
he increase in the effec
f
tive tax rates in 2024 compared to 2023 was a result of higher
state taxes, driven by a prior year's benefit
f
from the Bruns
r
wick acquisition. 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 i
f
nsurance, as well as the impact of federal income tax credits, including those awarded from Mid Penn’s low-
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
48

income housing investments. The realization of Mid Penn’s defer
f red 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 $5.5 billion as of December 31, 2024, reflecting an increase of $180.1 million, or 3.4%,
compared to total assets of $5.3 billion as of December 31, 2023. The increase was primarily driven by organic loan
growth, increases in investment securities, and an increase in Fed Funds Sold.
Investment Securities
Mid Penn’s portfol
f io of held-to-maturity ("HTM") securities, recorded at amortized cost, decreased $16.7 million to $382.4
million as of December 31, 2024, as compared to $399.1 million as of December 31, 2023. Mid Penn’s total availabl
a e-for-
sale ("AFS") securities portfol
f io increased $36.9 million fro
f
m $223.6 million at December 31, 2023 to $260.5 million at
December 31, 2024.
At December 31, 2024, the unrealized loss on AFS investment securities resulted in a negative impact to shareholders’
equity of $1.6 million (comprised of a gross unrealized loss on securities of $2.0 million, net of deferred income tax). At
December 31, 2023, the unrealized gain on AFS investment securities resulted in a positive impact to shareholders’ equity
of $2.0 million (comprised of a gross unrealized gain on securities of $2.1 million, net of defer
f red income tax). Mid Penn
does not have any significant concentrations of non-governmental securities within its investment portfol
f io.
Mid Penn’s investment portfol
f io is utilized primarily to support overall liquidity and interest rate risk management, to
provide collateral supporting pledging requirements for
f
public funds on deposit, and to generate additional interest income
within reasonabl
a e risk parameters. Mid Penn’s investment portfol
f io includes both held-to-matur
t
ity securities and availabl
a e-
for-sale securities.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
49

The fol
f lowing tabl
a e presents the expected maturities of the investment portfol
f io and the weighted average yields
(calculated based on historical cost and net of tax) as of December 31, 2024:
Maturing
(In T
I
hous
T
ands)s
One Year
and Less
Afte
f r One Year
thru Five Years
Afte
f r Five Years
Thru Ten Years
Afte
f r Ten
Years
As of December 31, 2024
Amount
Weighted
Average
Yield
Amount
Weighted
Average
Yield
Amount
Weighted
Average
Yield
Amount
Weighted
Average
Yield
Availabl
a e for
f
sale securities, at
fair value:
U.S. Treasury a
r
nd U.S.
government agencies
$ 5,476
3.49 % $14,224
2.40 % $ 1,807
3.30 % $
—
— %
Mortgage-backed U.S.
government agencies
—
—
—
—
5,292
2.53
197,652
3.72
State and political subdi
u
vision
obligations
—
—
—
—
2,948
2.49
648
2.23
Corporate debt securities
4,990
5.15
7,190
4.32
20,250
4.42
—
—
$10,466
4.28 % $21,414
3.05 % $30,297
3.84 % $198,300
3.71 %
Held to maturity securities, at
amortized cost:
U.S. Treasury a
r
nd U.S.
government agencies
$ 8,100
3.07%
$99,111
1.88%
$134,730
2.10%
$
—
—%
Mortgage-backed U.S.
government agencies
—
—
1,937
2.97
4,865
2.80
30,791
2.01
State and political subdi
u
vision
obligations
9,457
2.39
37,111
2.45
15,010
2.27
15,884
2.59
Corporate debt securities
2,006
3.89
3,995
3.18
19,450
4.10
—
—
$19,563
2.83 % $142,154
2.08 % $174,055
2.36 % $ 46,675
2.21 %
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
50

Loans, net of unearned income
h
The f lol
f lo i
wi g
ng tablbl
a e presents the endidi g
ng balance of l
f loans outstandidi g
ng, by
by ytype, as of December 31:
2023
Change in Balance
(Dollars in thousands)s
Balance
% of Total
Loans
Balance
% of Total
Loans
$
%
Commercial real estate
CRE Nonowner Occupied
$ 1,251,010
28.1 % $ 1,149,553
27.0 % $ 101,457
8.8 %
CRE Owner Occupi
u ed
624,007
14.0
629,904
14.8
(5,897)
(0.9)
Multifamily
412,900
9.3
309,059
7.3
103,841
33.6
Farmland
224,709
5.1
212,690
5.0
12,019
5.7
Total Commercial Real Estate
2,512,626
56.5
2,301,206
54.1
211,420
9.2
Commercial and industrial
705,392
15.9
675,079
15.9
30,313
4.5
Construc
r
tion
Residential Construc
r
tion
99,399
2.2
92,843
2.2
6,556
7.1
Other Construction
326,171
7.3
362,624
8.5
(36,453)
(10.1)
Total Construction
425,570
9.5
455,467
10.7
(29,897)
(6.6)
Residential mortgage
1-4 Family 1st Lien
313,592
7.1
339,142
8.0
(25,550)
(7.5)
1-4 Family Rental
336,636
7.6
341,937
8.0
(5,301)
(1.6)
HELOC and Junior Liens
140,392
3.2
132,795
3.1
7,597
5.7
Total Residential Mortgage
790,620
17.9
813,874
19.1
(23,254)
(2.9)
Consumer
8,862
0.2
7,166
0.2
1,696
23.7
$ 4,443,070
100.0 % $ 4,252,792
100.0 % $ 190,278
4.5 %
Total loans, net of unearned income, as of December 31, 2024 were $4.4 billion compared to $4.3 billion as of
December 31, 2023, an increase of $190.3 million.
The majority of the Bank's loan portfol
f io 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, Fayette, Huntingdon,
Lancaster, Lehigh, Luzerne, Montgomery,
r
Perry, Schuylkill and Westmoreland, along with Middlesex and Monmouth
counties of New Jersey. Commercial real estate, construc
r
tion, 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 portfol
f io diversific
f ation, underwriting policies and procedur
d
es, and loan monitoring
practices. Lenders are provided with detailed underwriting policies for
f
all types of credit risks accepted by the Bank and
must obtain appr
a
opriate internal approvals for credit extensions. The Bank also maintains strict documentation
requirements and robust credit quality assurance practices in order to identify c
f
redit portfol
f io weaknesses as early as
possible, so any exposures that are discovered might be mitigated or potential losses reduc
d
ed. 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.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
51

The fol
f lowing tabl
a e represents the Commercial Real Estate portfol
f io by property type along with the weighted average loan
to value as of December 31, 2024:
(Dollars in thousands)s
December 31, 2024
December 31, 2023
Commercial Real Estate
Balance
% of
portfolio
Weighted
Average LTV (2)
Balance
% of
portfol
f io
Weighted
Average LTV (2)
Owner Occupi
u ed (1)
$
624,007
24.8 %
N/A
$ 629,904
27.5 %
N/A
Farmland (1)
224,709
8.9
N/A
212,690
9.2
N/A
Multifamily
412,900
16.4
63.8
309,059
13.4
58.9
Non Owner Occupi
u ed
Retail
426,171
17.0
60.3
414,485
18.0
51.0
Offi
f ce
296,468
11.8
63.2
301,810
13.1
64.4
Industrial
161,683
6.4
53.2
156,075
6.8
49.3
Hospitality
152,060
6.1
51.2
137,718
6.0
49.4
Flex
44,187
1.8
44.2
39,374
1.7
56.0
Mobile Home Park
17,748
0.7
67.7
21,298
0.9
68.4
Health Care
14,511
0.6
55.3
15,618
0.7
54.6
Other Property Types
138,182
5.5
64.1
63,175
2.7
43.2
Total Commercial Real Estate
$ 2,512,626
100.0%
59.9 % $2,301,206
100.0%
55.4 %
(1) LTV not availabl
a e for
f
Owner Occupi
u ed and Farmland properties.
(2) Weighted average Loan to Value is calculated based on estimated current market values of the properties.
Maturity distribution by contractua
t
l matur
t
ity date and rate sensitivity information related to the loan portfol
f io is reflected in
the table below:
Thousands)s
As of December 31, 2024
One Year
and Less
One to
Five Years
Five to
Fifteen
Years
Over
Fifteen
Years
Total
Commercial real estate
CRE Nonowner Occupied
$
59,218
$
402,110
$
499,042
$
290,640
$
1,251,010
CRE Owner Occupi
u ed
24,643
66,949
258,018
274,397
624,007
Multifamily
43,742
157,530
107,420
104,208
412,900
Farmland
648
8,603
61,388
154,070
224,709
Total Commercial real estate
128,251
635,192
925,868
823,315
2,512,626
Commercial and industrial
28,535
335,077
105,795
235,985
705,392
Construc
r
tion
Residential Construc
r
tion
61,942
24,436
11,742
1,279
99,399
Other Construction
148,374
138,126
17,267
22,404
326,171
Total Construc
r
tion
210,316
162,562
29,009
23,683
425,570
Residential mortgage
1-4 Family 1st Lien
4,749
26,252
80,764
201,827
313,592
1-4 Family Rental
10,733
54,091
99,131
172,681
336,636
HELOC and Junior Liens
8,956
14,778
34,165
82,493
140,392
Total Residential Mortgage
24,438
95,121
214,060
457,001
790,620
Consumer
2,698
1,805
1,404
2,955
8,862
Total loans held in portfol
f io
$
394,238
$
1,229,757
$
1,276,136
$
1,542,939
$
4,443,070
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
52

Fixed interest rates:
Commercial real estate
CRE Nonowner Occupied
$
48,354
$
206,561
$
73,775
$
9,349
$
338,039
CRE Owner Occupi
u ed
17,627
46,818
21,985
2,054
88,484
Multifamily
37,898
84,222
6,755
—
128,875
Farmland
483
7,422
6,620
56
14,581
Total Commercial real estate
104,362
345,023
109,135
11,459
569,979
Commercial and industrial
15,481
203,308
20,008
11,207
250,004
Construc
r
tion
Residential Construc
r
tion
25,215
7,324
315
—
32,854
Other Construction
24,555
37,269
1,094
808
63,726
Total Construc
r
tion
49,770
44,593
1,409
808
96,580
Residential mortgage
1-4 Family 1st Lien
4,713
21,152
50,657
132,028
208,550
1-4 Family Rental
7,395
49,140
4,893
8,532
69,960
HELOC and Junior Liens
454
6,665
23,972
2,400
33,491
Total Residential Mortgage
12,562
76,957
79,522
142,960
312,001
Consumer
1,409
1,782
1,404
503
5,098
Total fix
f ed interest rates
$
183,584
$
671,663
$
211,478
$
166,937
$
1,233,662
Floating interest rates:
Commercial real estate
CRE Nonowner Occupied
$
10,864
$
195,549
$
425,267
$
281,291
$
912,971
CRE Owner Occupi
u ed
7,016
20,131
236,033
272,343
535,523
Multifamily
5,843
73,309
100,665
104,208
284,025
Farmland
165
1,180
54,769
154,014
210,128
Total Commercial real estate
23,888
290,169
816,734
811,856
1,942,647
Commercial and industrial
13,054
131,768
85,787
224,779
455,388
Construc
r
tion
Residential Construc
r
tion
36,727
17,113
11,426
1,279
66,545
Other Construction
123,819
100,856
16,173
21,597
262,445
Total Construc
r
tion
160,546
117,969
27,599
22,876
328,990
Residential mortgage
1-4 Family 1st Lien
36
5,100
30,107
69,799
105,042
1-4 Family Rental
3,338
4,951
94,238
164,149
266,676
HELOC and Junior Liens
8,502
8,114
10,193
80,092
106,901
Total Residential Mortgage
11,876
18,165
134,538
314,040
478,619
Consumer
1,290
23
—
2,451
3,764
Total flo
f ating interest rates
210,654
558,094
1,064,658
1,376,002
3,209,408
Total fix
f ed and flo
f ating interest rates
$
394,238
$
1,229,757
$
1,276,136
$
1,542,939
$
4,443,070
Credit Quality, Credit Risk, and Allowance for
f
Credit Losses
Q
y,
,
Mid Penn adopted FASB ASC 326, in accordance with the amendments of FASB ASU 2016-13, effe
f ctive January 1, 2023.
The guidance in FASB ASC 326 replaced Mid Penn’s previous incurred loss methodology with a methodology that reflects
the current expected credit losses and requires consideration of a broader range of reasonabl
a e and suppor
u
tabl
a e infor
f
mation
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
53

to determine credit losses. Mid Penn’s ACL methodology for loans is based upon
u
guidance within FASB ASC Subtopic
326-20, "Financial Instruments – Credit Losses – Measured at Amortized Cost," as well as regulatory g
r
uidance from
f
the
FDIC, the Bank's primary federal regulator. The ACL is a valuation account that is deducted fro
f
m the loans’ amortized cost
basis to present the net amount expected to be collected on the loans. Credit quality within the loan portfol
f io is
continuously monitored by management and is reflected within the ACL for
f
loans. The ACL is an estimate of expected
losses inherent within Mid Penn’s existing loan portfol
f io. 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 procedur
d
es to appropriately consider the unique characteristics of Mid Penn’s
loan portfol
f io segments. When computing allowance levels, credit loss assumptions are estimated using a model that
categorizes loan pools based on loss history,
r
delinquency status and other credit trends and risk characteristics, including
current conditions and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts about the fut
f ur
t
e. Evaluations of the portfol
f io and individual
credits are inherently subjective, as they require estimates, assumptions and judgments as to the fact
f
s and circumstances of
particular situations. Determining the appr
a
opriateness of the allowance is complex and requires judgement by management
about the effect of matters that are inherently uncertain. In fut
f ur
t
e periods, evaluations of the overall loan portfol
f io, in light
of the fact
f
ors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense.
The fol
f lowing tabl
a e represents the allowance for
f
credit loss as a percentage of total loans:
Thousands)s
As of December 31, 2024
Total ACL - Loans
Total Loans
% of Total Loans
Outstanding
Allowance as a %
of Loan Category
Commercial real estate
CRE Nonowner Occupied
$
11,047
$
1,251,010
28.1 %
0.9 %
CRE Owner Occupi
u ed
5,243
624,007
14.0
0.8
Multifamily
3,432
412,900
9.3
0.8
Farmland
1,932
224,709
5.1
0.9
Total Commercial real estate
21,654
2,512,626
56.5
0.9
Commercial and industrial
7,122
705,392
15.9
1.0
Construc
r
tion
Residential Construc
r
tion
931
99,399
2.2
0.9
Other Construction
2,131
326,171
7.3
0.7
Total Construction
3,062
425,570
9.5
0.7
Residential mortgage
1-4 Family 1st Lien
1,503
313,592
7.1
0.5
1-4 Family Rental
1,756
336,636
7.6
0.5
HELOC and Junior Liens
392
140,392
3.2
0.3
Total Residential mortgage
3,651
790,620
17.9
0.5
Consumer
25
8,862
0.2
0.3
Total
$
35,514
$
4,443,070
100.0 %
0.8 %
For a complete description of Mid Penn’s ACL methodology and the quantitative and qualitative fact
f
ors 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.
Upon the adoption of FASB ASC 326 on January 1, 2023, Mid Penn recorded an overall increase of $15.0 million to the
ACL on January 1, 2023 as a result of the adoption of CECL. Retained earnings decreased $11.5 million and defer
f red tax
assets increased by $3.1 million. Included in the $15.0 million increase to the ACL was $3.1 million for certain OBS credit
exposures that were previously recognized in other liabi
a lities befor
f
e the adoption of CECL. The ACL and the related PCL
for the year ended December 31, 2022 reflects Mid Penn’s appl
a
ication of the incurred loss method for estimating credit
losses.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
54

The fol
f lowing tabl
a e represents non-performing assets as of:f
December 31,
(Dollars in thousands)s
2024
2023
2022
Non-performing Assets:
Total non-accrua
r
l loans
$
22,610
$
14,216
$
8,585
Foreclosed real estate
44
293
43
Total non-performing assets
22,654
14,509
8,628
Accrui
r ng loans 90 days or more past due
d
—
—
654
Total risk elements
$
22,654
$
14,509
$
9,282
Non-accrua
r
l loans as a percentage of total loans outstanding
0.51 %
0.33 %
0.24 %
Non-performing assets as a percentage of total loans outstanding and
foreclosed real estate
0.51%
0.34%
0.25%
Allowance for
f
credit losses as a percentage of total loans
0.80%
0.80%
0.54%
Ratio of ACL to non-performing loans
157.07%
240.48%
220.82%
Total nonperforming assets were $22.7 million at December 31, 2024, an increase compared to nonperforming assets of
$14.5 million at December 31, 2023. The increase since December 31, 2023 was primarily the result of the addition of two
commercial loans with a combined balance of $3.0 million, and two commercial real estate loans with a combined balance
of $2.3 million being placed on nonaccrual in the four
f
th quarter of 2024.
Deposits and Other Funding Sources
p
g
Mid Penn's primary source of funds are retail deposits from businesses, public funds depositors, and consumers in its
market area. For the year ended December 31, 2024, deposits totaled $4.7 billion, an increase of $343.7 million, or 7.9%,
compared to $4.3 billion as of December 31, 2023.
Average balances and average interest rates appl
a
icable to deposits by major classification for
f
the years ended December 31:
2024
2023
Change
(Dollars in thousands)s
Balance
Rate
Balance
Rate
$
%
Noninterest-bearing demand
deposits
$
780,538
0.00 % $
800,582
0.00 % $
(20,044)
(2.50)%
Interest-bearing demand deposits
1,001,813
1.90
950,326
1.46
51,487
5.42
Money market
913,311
2.91
926,034
2.31
(12,723)
(1.37)
Savings
275,692
0.09
312,053
0.07
(36,361)
(11.65)
Time
1,541,654
4.57
1,116,552
3.92
425,102
38.07
$ 4,513,008
2.58 % $ 4,105,547
1.93 % $
407,461
9.92 %
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
55

As of December 31, 2024, uninsured deposits were appr
a
oximately $1.4 billion compared to $1.2 billion as of December 31,
2023. The matur
t
ities of the uninsured time deposits as of December 31, 2024 were as follows:
(In thousands)s
2024
Three months or less
$
183,138
Over three months to six months
89,493
Over six months to twelve months
72,526
Over twelve months
15,552
$
360,709
Short-term borrowings as of December 31, 2024 totaled $2.0 million, compared to $241.5 million as of December 31,
2023, and consisted of $2.0 million of FHLB overnight borrowings. As of December 31, 2024, the Bank had long-term
debt outstanding in the amount of $23.6 million compared to $59.0 million as of December 31, 2023.
Subor
u
dinated debt and trus
r
t preferred securities totaled $45.7 million as of December 31, 2024 compared to $46.4 million
as of December 31, 2023. There were no redemptions of subor
u
dinated debt in 2024. In April 2023, Mid Penn redeemed
$10.0 million subordinated debt issued in December of 2017. See "Note 11 - Subordinated Debt and Trus
r
t Preferred
Securities", within Item 8, Notes to Consolidated Financial Statements.
Shareholders' Equity and Capital
q
y
p
Shareholders' equity, or capital, is evaluated in relation to total assets and the risk associated with those assets. The detailed
computation of Mid Penn’s regulatory c
r
apital ratios can be found in "Note 17 - Regulatory M
r
atters", within Item 8, Notes
to Consolidated Financial Statements. The greater the Corpor
r
ation’s capital resources, the more likely it is to meet its cash
obligations and abs
a
orb u
r
nfor
f
eseen losses. Capi
a tal management practices have been, and will continue to be, of paramount
importance to the Corporation in support of both its regulatory c
r
apital requirements and its shareholders.
Shareholders’ equity increased $112.7 million, or 20.8%, to $655.0 million as of December 31, 2024 from $542.4 million
as of December 31, 2023, primarily as result of completion of the underwritten public offe
f ring of 2,375,000 shares of
common stock in November 2024, and net income, partially offs
f et by dividends declared of $13.8 million and share
repurchases totaling $323 thousand.
Mid Penn maintained regulatory c
r
apital levels, leverage ratios, and risk-based capital ratios as of December 31, 2024 and
2023, as follows:
December 31,
2024
December 31,
2023
Regulatory
r
Minimum for
f
Capi
a tal Adequacy
Tier I Leverage Capital (to Average Assets)
9.98 %
8.32 %
4.00 %
Common Equity Tier I (to Risk-Weighted Assets)
12.09
9.78
7.00
Tier I Risk-Based Capital (to Risk-Weighted Assets)
12.09
9.78
8.50
Total Risk-Based Capital (to Risk-Weighted Assets)
13.98 %
11.69 %
10.50 %
As of December 31, 2024 and December 31, 2023, Mid Penn and the Bank met all capital adequacy requirements, and the
Bank was considered "well-capi
a talized". However, future changes in regulations could increase capital requirements and
may have an adverse effect on capital resources.
Liquidity
q
y
Mid Penn’s objective is to maintain adequate liquidity to meet funding needs at a reasonabl
a e cost and to provide
contingency plans to meet unanticipated funding needs or a loss of funding sources, while minimizing interest rate risk.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
56

Adequate liquidity provides resources for credit needs of borrowers, for
f
depositor withdrawals, and for
f
funding corporate
operations. Sources of liquidity are as fol
f lows:
•
a growing core deposit base;
•
proceeds fro
f
m 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 availabl
a e fro
f
m the FHLB and the Federal Reserve Discount Window availabl
a e 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 stabl
a e and exceeds our minimum defin
f ed 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 reasonabl
a y
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 Liabi
a lity Committee and Board of
Directors. The analysis provides a summary of the current liquidity measurements, proje
o ctions, and futur
t
e liquidity
positions given various levels of liquidity stress. Management also maintains a detailed Contingency Funding Plan
designed to respond to overall stress in the fin
f ancial condition of the banking industry o
r
r a prospective liquidity problem
specific to Mid Penn.
The Consolidated Statements of Cash Flows provide additional infor
f
mation. Mid Penn’s operating activities dur
d
ing the
year ended December 31, 2024 provided $51.4 million of cash, mainly due to net income. Cash used in investing activities
during the year ended December 31, 2024 was $208.7 million, mainly the result of the net increase in loans. Cash provided
by financing activities during the year ended December 31, 2024 totaled $131.2 million, primarily the result of an increase
in net deposits.
Contractua
t
l Obligations
g
Mid Penn has subs
u
tantial aggregate contractua
t
l obligations to make future cash payments as of December 31, 2024 as
outlined below:
Total
Payments Due by Period
(Dollars in thousands)s
One Year
or
Less
One to
Three
Years
Three to
Five
Years
More than
Five
Years
Operating lease obligations
$
8,978
$
2,361
$
4,057
$
1,943
$
617
Finance lease obligation
3,992
260
520
535
2,677
Certific
f ates of deposit
1,684,672
1,511,996
152,422
16,530
3,724
Long-term debt
20,586
344
20,241
1
—
Subor
u
dinated debt
45,741
—
—
—
45,741
$ 1,763,969
$ 1,514,961
$
177,240
$
19,009
$
52,759
Details on expected maturities of investments, loans and deposits are presented in the above
a
sections of Management's
Discussion and Analysis. We are not aware of any other commitments or contingent liabi
a lities which may have a material
adverse impact on Mid Penn’s liquidity or capital resources.
Effe
f cts of Infla
f tion
A bank's asset and liabi
a lity struc
r
ture is subs
u
tantially diffe
f rent from that of an industrial company in that virtua
t
lly all assets
and liabi
a lities of a bank are monetary in nature. Management believes the impact of inflation on its financial results
depends principally upon
u
Mid Penn's abi
a lity to measure its sensitivity to changes in interest rates and to take appr
a
opriate
actions, as needed or controllable by the Bank, to mitigate the impacts of infla
f tion on performance. Interest rates do not
necessarily move in the same direction or at the same magnitude as the prices of other goods and services. As discussed
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
57

previously, management seeks to manage the relationship between interest sensitive assets and liabi
a lities in order to protect
against wide interest rate flu
f ctua
t
tions, including those resulting fro
f
m infla
f tion.
Information included elsewhere in this report will assist in the understanding of how Mid Penn is positioned to react to
changing interest rates and inflationary trends. In particular, the previously discussed risk fact
f
ors, the composition of and
yields on loans and investments, and the composition and costs of deposits and other interest-bearing liabi
a lities, should be
considered.
Off-B
f
alance Sheet Risk
Mid Penn makes contractua
t
l commitments to extend credit and extends lines of credit, which are subj
u ect to Mid Penn's
credit approval and monitoring procedur
d
es. As of December 31, 2024, commitments to extend credit amounted to $1.2
billion compared to $1.5 billion as of December 31, 2023.
Mid Penn also issues standby letters of credit to its customers. The risk associated with standby letters of credit is
essentially the same as the credit risk involved in loan extensions to customers. Standby letters of credit increased to $64.3
million at December 31, 2024, fro
f
m $62.2 million at December 31, 2023.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Q
Q
As a fin
f ancial 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 fut
f ur
t
e earnings (earnings at risk) resulting fro
f
m changes in interest rates. This exposure or
sensitivity is a func
f
tion of the repricing characteristics of Mid Penn's portfol
f io of assets and liabi
a lities. Each asset and
liabi
a lity reprices either at maturity or during the life of the instrum
r
ent. Interest rate sensitivity is measured as the diffe
f rence
between the volume of assets and liabi
a lities that are subj
u ect to repricing in a future period of time.
The principal purpos
r
e of asset-liability management is to maximize current and fut
f ur
t
e 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 acceptabl
a e 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 matur
t
ity gap a
a
nalysis regularly. Mid Penn does
not always attempt to achieve an exact match between interest sensitive assets and liabi
a lities because it believes that an
actively managed amount of interest rate risk is inherent and appr
a
opriate in the management of Mid Penn’s profitabi
a lity.
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 liabi
a lities,
prepayments on amortizing assets, non-maturing deposit sensitivity, and loan and deposit pricing. These assumptions are
inherently uncertain due to the timing, magnitude and fre
f quency of rate changes and changes in market conditions and
management strategies, among other fact
f
ors. However, the analyses are useful
f
in quantifyi
f ng 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 bp and decreased by 100, 200, 300, and 400 bp. These scenarios, detailed in the
tabl
a e 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 reduc
d
tion in interest rates would result in a decline in net interest income over a one-
year time frame; however, actua
t
l results could vary s
r
ignificantly from the calculations prepared by management. At
December 31, 2024, all interest rate risk levels according to the model were within the tolerance limits of the Board-
approved policy.
MID PENN BANCORP, INC.
Management’s Discussion and Analysis
58

The fol
f lowing table refle
f cts the effe
f ct of hypothetical changes in interest rates:
Change in
Basis Points
% Change in
Net Interest Income
Policy
Risk Limit
400
9.0%
≥-25%
300
6.8%
≥-20%
200
4.6%
≥-15%
100
2.4%
≥-10%
(100)
(2.3)%
≥-10%
(200)
(4.7)%
≥-15%
(300)
(7.2)%
≥-20%
(400)
(8.2)%
≥-25%
59

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The fol
f lowing audited fin
f ancial statements are set forth in this Annual Report on Form 10-K on the following pages:
Index to Financial Statements
Management Report on Internal Controls Over Financial Reporting
g
p
p
g
61
Reports of Independent Registered Publ
u ic Accounting Firms
p
p
g
g
62
Consolidated Balance Sheets
66
Consolidated Statements of Income
67
Consolidated Statements of Comprehensive Income
p
68
Consolidated Statements of Changes in Shareholders' Equity
g
q
y
69
Consolidated Statements of Cash Flows
70
Notes to Consolidated Financial Statements
72
MID PENN BANCORP, INC.
60

Management Report on Internal Controls Over Financial Reporting
The Corpor
r
ation carried out an evaluation, under the supe
u
rvision and with the participation of the Corporation’s
management, including the Corpor
r
ation’s Chief Executive Officer and Chief Financial Officer, of the effe
f ctiveness of its
disclosure controls and procedures, as defined in SEC Rules 13a-15(e) and 15d-15(e). Based upon the evaluation, the
Corporation’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, the
Corporation’s disclosure controls and procedur
d
es are effective. Disclosure controls and procedur
d
es are designed to ensure
that information required to be disclosed in the Corpor
r
ation’s reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
The management of the Corporation is responsible for establishing and maintaining adequate internal control over fin
f ancial
reporting. The Corpor
r
ation’s internal control system is designed to provide reasonabl
a e assurance regarding the reliabi
a lity of
financial reporting and the preparation of fin
f ancial statements for external purpos
r
es in accordance with U.S. generally
accepted accounting principles. Because of its inherent limitations, internal control over fin
f ancial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness of fut
f ur
t
e periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedur
d
es may deteriorate.
Management assessed the effe
f ctiveness of the Corporation’s internal control over fin
f ancial reporting as of December 31,
2024, using the criteria set for
f
th by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Contro
t
l-Integr
e
ated Framework (
r
2013)
(
. Based on this assessment, management concluded that, as of December 31,
2024, the Corpor
r
ation’s internal control over fin
f ancial reporting is effective based on those criteria.
The effectiveness of the Corporation’s internal control over fin
f ancial reporting has been audited by RSM US LLP, an
independent registered public accounting fir
f m, as stated in their report which is included herein.
/s/ Rory G
r
. Ritrievi
/s/ Justin T. Webb
Rory G. Ritrievi
Justin T. Webb
President and
Chief Financial Offi
f cer
Chief Executive Officer
March 13, 2025
March 13, 2025
MID PENN BANCORP, INC.
61

Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Mid Penn Bancorp,
r
Inc. and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Mid Penn Bancorp,
r
Inc. and Subsidiaries (the
Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income,
changes in shareholders' equity and cash flo
f ws for each of the three years in the period ended December 31, 2024, and the
related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the fin
f ancial
statements present fai
f rly, in all material respects, the fin
f ancial position of the Company as of December 31, 2024 and 2023,
and the results of its operations and its cash flo
f ws for each of the three years in the period ended December 31, 2024, in
confor
f
mity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Publ
u ic Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over fin
f ancial reporting as of December 31, 2024, based on criteria
establ
a ished in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission in 2013, and our report dated March 13, 2025 expressed an unqualifie
f d opinion on the effectiveness
of the Company's internal control over fin
f ancial reporting.
Basis for
f
Opinion
These fin
f ancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s fin
f ancial statements based on our audits. We are a public accounting fir
f m registered with the PCAOB
and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonabl
a e assurance about
a
whether the financial statements are free of material misstatement,
whether due
d
to error or fra
f ud. Our audits included performing procedures to assess the risks of material misstatement of the
financial statements, whether due
d
to error or fra
f ud, and performing procedur
d
es that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonabl
a e basis for our
opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements
that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the fin
f ancial statements and (2) involved our especially challenging, subj
u ective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the fin
f ancial statements,
taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the
critical audit matters or on the accounts or disclosures to which they relate.
Allowance for
f
Credit Losses on Loans – Adju
d
stments to Historical Losses
As described in Note 1 and Note 4 of the fin
f ancial statements, the Company’s allowance for
f
credit losses (ACL) on loans is
establ
a ished through a provision for credit losses on loans and represents management’s estimate of all expected credit
losses over the expected contractua
t
l life o
f
f the Company’s loan portfol
f io. The methodology for estimating the amount of
expected credit losses reported in the ACL on loans has two basic components: a collective, or pooled, component for
estimated expected credit losses for
f
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
f
such individual loans. In estimating the ACL on loans for the collective component, loans are segregated into
loan pools based on loan purpos
r
e codes and similar risk characteristics. The ACL on loans as of December 31, 2024 was
$35.5 million, which consists of an ACL on loans collectively evaluated for credit losses of $34.1 million and an ACL on
loans individually evaluated for credit losses of $1.4 million.
The Company estimates the collective ACL on loans utilizing a discounted cash flo
f w (DCF) methodology applied to
portfol
f io segments and their loan pools segregated by similar risk characteristics. The Company’s DCF methodology
adju
d sts loan level contractua
t
l cash flo
f ws for probabi
a lity of defau
f
lt and loss given default and prepayment and curtailment
rate assumptions to calculate expected future cash flows. A correlation between the selected macroeconomic indicators of
62

national unemployment rate and GDP and historic loss levels, adju
d sted to include representative peer group l
u
oss
experience, was developed to predict loss expectations based on current economic conditions and a reasonabl
a e and
suppor
u
tabl
a e for
f
ecast period. At the end of the reasonabl
a e and suppor
u
tabl
a e for
f
ecast period, the Company reverts to the long-
term mean of the macroeconomic indicator. For the December 31, 2024 ACL on loans, the Company determined that
reasonabl
a e and suppor
u
tabl
a e for
f
ecasts could be made for
f
a 12-month period and used a reversion period of four quarters
reverting to the historical mean on a straight-line basis. The Company also calculates a qualitative portion of the ACL,
which is based on general economic conditions and other internal and external fact
f
ors affecting Mid Penn’s loan portfol
f io.
At December 31, 2024, qualitative fact
f
ors considered for the ACL on loans included concentrations of credit, lending
process, and peer group divergence.
We identifie
f d the adju
d stments to historical losses, both as it relates to the economic forecast selection and the qualitative
factors, within the Company’s ACL on loans calculation as a critical audit matter as auditing the underlying adju
d stments
required significant auditor judgment in the evaluation of the Company’s assumptions.
Our audit procedur
d
es related to the Company’s adjustments to historical loss information component of the ACL on loans
included the following, among others:
• We obtained an understanding of the relevant controls related to the ACL on loans and tested such controls for
f
design
and operating effe
f ctiveness, including controls relating to management’s review and approval of the ACL on loans
calculation, management’s assessment and review of the adju
d stments to historical loss information component of the
ACL on loans for current conditions and for
f
ecasted scenarios and management’s validation of underlying source data.
• We tested management’s calculation of adjustments to historical loss information within the ACL on loans calculation
by:
◦Agreeing calculation inputs to the Company’s internal and external source data, including for current and
forecasted conditions;
◦Verifying the mathematical accuracy of the calculation of adju
d stments to historical loss information; and
◦Evaluating whether adju
d stments to historical loss information within the ACL on loans, or lack thereof, were
reasonabl
a e and consistent with Company provided internal data and external independent data, including data
related to current and for
f
ecasted periods.
• We assessed the reasonabl
a eness of management’s calculated changes in adjustments to historical loss information
within the ACL on loans calculation by:
◦Evaluating the magnitude and directional consistency of changes, or lack thereof, in the level of adju
d stments
to historical loss information between periods; and
◦Evaluating whether management’s conclusions were reasonabl
a e and consistent with Company provided
internal data and external independent data, including data related to current and for
f
ecasted periods.
• We agreed management’s calculated adju
d stments to historical loss information to the ACL on loans calculation.
Goodwill Impairment – Fair Value of Reporting Unit
As described in Note 1 and Note 6 of the fin
f ancial statements, the Company’s goodwill balance was $128.2 million as of
December 31, 2024. Goodwill is tested annually for impairment, or at interim periods if certain events occur which may
indicate the fair value of the reporting unit has fallen below its carrying amount, by comparing the estimated fai
f r value of
Company’s single reporting unit to its carrying value. The Company estimates the fair value of its single reporting unit
through multiple valuation techniques, including a public company market change of control appr
a
oach and a peer group
u
change of control appr
a
oach. Significant judgment is required to estimate the fai
f r value of the Company’s single reporting
unit including the evaluation of current market data as well as the selection of a control premium.
We identifie
f d the Company’s annual goodwill impairment test as a critical audit matter due
d
to the complexity of the
analysis and certain significant assumptions made by management in estimating the fair value of the Company’s reporting
unit such as the determination of a reasonabl
a e control premium and the identific
f ation of peer public companies. Auditing
management’s assumptions required a high degree of auditor judgement, subjectivity, and increased audit effort, including
the use of internal valuation specialists, due
d
to the impact these assumptions could have on the accounting estimate.
Our audit procedures related to the Company’s annual goodwill impairment test included the following, among others:
• We obtained an understanding of the relevant controls related to management’s annual test of goodwill for impairment
and tested such controls for design and operating effec
f
tiveness, including controls over management’s preparation of
the significant assumptions such as the control premium.
63

• We tested the completeness and accuracy of the underlying data used by management in the fai
f r value estimate by
agreeing Company fin
f ancial data to internal Company records.
• We utilized internal valuation specialists who assisted in the fol
f lowing, among others:
◦Evaluating the completeness and accuracy of the market data used in management’s calculation of the control
premium by comparing such market data to independently sourced infor
f
mation.
◦Evaluating the comparability of the Company to the peer public companies identifie
f d by management through
consideration of size, location, and recent results of operations, among other fact
f
ors.
◦Evaluating the appropriateness of the valuation models used in management’s analysis and comparing
management’s selected control premium to publicly availabl
a e market data.
We have served as the Company's auditor since 2020.
/s/ RSM US LLP
Philadelphia, Pennsylvania
March 13, 2025
64

Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Mid Penn Bancorp,
r
Inc. and Subsidiaries
Opinion on the Internal Control Over Financial Reporting
We have audited Mid Penn Bancorp,
r
Inc. and Subsidiaries' (the Company) internal control over fin
f ancial reporting as of
December 31, 2024, based on criteria established in Internal Contro
t
l — Integr
e
ated Framework
r issued by the Committee of
Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material
respects, effe
f ctive internal control over fin
f ancial reporting as of December 31, 2024, based on criteria established in
Internal Contro
t
l — Integr
e
ated Framework
r
issued by the Committee of Sponsoring Organizations of the Treadway
Commission in 2013.
We have also audited, in accordance with the standards of the Publ
u ic Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements of the Company and our report dated March 13, 2025 expressed an
unqualifie
f d opinion.
Basis for
f
Opinion
The Company’s management is responsible for maintaining effe
f ctive internal control over fin
f ancial reporting and for its
assessment of the effe
f ctiveness of internal control over fin
f ancial reporting in the accompanying Management Report on
Internal Controls Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over fin
f ancial reporting based on our audit. We are a public accounting fir
f m registered with the PCAOB and are required to
be independent with respect to the Company in accordance with U.S. federal securities laws and the appl
a
icable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonabl
a e assurance about
a
whether effective internal control over fin
f ancial reporting was maintained in
all material respects. Our audit included obtaining an understanding of internal control over fin
f ancial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. Our audit also included performing such other procedur
d
es as we considered necessary in the
circumstances. We believe that our audit provides a reasonabl
a e basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company's internal control over fin
f ancial reporting is a process designed to provide reasonabl
a e assurance regarding the
reliabi
a lity of financial reporting and the preparation of fin
f ancial statements for external purpos
r
es in accordance with
generally accepted accounting principles. A company's internal control over fin
f ancial reporting includes those policies and
procedur
d
es that (1) pertain to the maintenance of records that, in reasonabl
a e detail, accurately and fai
f rly refle
f ct the
transactions and dispositions of the assets of the company; (2) provide reasonabl
a e assurance that transactions are recorded
as necessary to permit preparation of fin
f ancial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the company's assets that could have a material effect on the fin
f ancial statements.
Because of its inherent limitations, internal control over fin
f ancial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effe
f ctiveness to fut
f ur
t
e periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedur
d
es may deteriorate.
/s/ RSM US LLP
Philadelphia, Pennsylvania
March 13, 2025
65

(In thousands, excep
e
t per share dat
d a)
December 31, 2024
December 31, 2023
ASSETS
Cash and due
d
from banks
$
37,002
$
45,435
Interest-bearing balances with other fin
f ancial institutions
14,490
34,668
Federal funds
f
sold
19,072
16,660
Total cash and cash equivalents
70,564
96,763
Investment securities:
Held to maturity, at amortized cost (fair value $340,648 and $357,521)
382,447
399,128
AFS, at fair value (amortized cost $284,770 and $245,886)
260,477
223,555
Equity securities, at fair value
428
438
Loans held for
f
sale, at fai
f r value
7,064
3,855
Loans, net of unearned income
4,443,070
4,252,792
Less: ACL - Loans
(35,514)
(34,187)
Net loans
4,407,556
4,218,605
Premises and equipment, net
38,806
36,909
Operating lease right of use asset
7,699
8,953
Finance lease right of use asset
2,548
2,727
Cash surrender value of life i
f
nsurance
51,521
54,497
Restricted investment in bank stocks
7,461
16,768
Accrue
r
d interest receivabl
a e
26,846
25,820
Deferred income taxes
22,747
24,146
Goodwill
128,160
127,031
Core deposit and other intangibles, net
6,242
6,479
Foreclosed assets held for sale
44
293
Other assets
50,326
44,825
Total Assets
$
5,470,936
$
5,290,792
LIABILITIES & SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand
$
759,169
$
801,312
Interest-bearing transaction accounts
2,319,753
2,086,450
Time
1,611,005
1,458,450
Total Deposits
4,689,927
4,346,212
Short-term borrowings
2,000
241,532
Long-term debt
23,603
59,003
Subor
u
dinated debt
45,741
46,354
Operating lease liabi
a lity
8,092
9,285
Accrue
r
d interest payable
13,484
14,257
Other liabi
a lities
33,071
31,799
Total Liabi
a lities
4,815,918
4,748,442
Shareholders' Equity:
Common stock, par value $1.00 per share; 40,000,000 shares authorized;
19,796,519 issued at December 31, 2024 and 16,998,929 at December 31, 2023;
19,355,797 outstanding at December 31, 2024 and 16,573,707 at December 31,
2023
19,797
16,999
Additional paid-in capital
480,491
405,725
Retained earnings
181,597
145,982
Accumulated other comprehensive loss
(16,825)
(16,637)
Treasury S
r
tock, at cost; 440,722 and 425,222 shares at December 31, 2024 and
December 31, 2023
(10,042)
(9,719)
Total Shareholders’ Equity
655,018
542,350
Total Liabi
a lities and Shareholders' Equity
$
5,470,936
$
5,290,792
(
)
(
)
(
)
(
)
,
,
,
,
$
,
,
$
,
,
,
,
,
,
$
,
,
$
,
,
The accompanying notes are an integra
g
l part of t
o
hese Consolidat
d ed Financial Sta
S tements.
t
MID PENN BANCORP, INC.
Consolidated Balance Sheets
66

Years Ended December 31,
(In t
I
housands, exc
e
ept per share dat
d a)
2024
2023
2022
INTEREST INCOME
Loans, including fees
f
$
265,522
$
218,060
$
150,256
Investment securities:
Taxabl
a e
16,542
16,005
11,952
Tax-exempt
1,464
1,540
1,497
Other interest-bearing balances
1,127
361
69
Federal funds
f
sold
1,928
373
1,826
Total Interest Income
286,583
236,339
165,600
INTEREST EXPENSE
Deposits
116,320
79,295
14,144
Short-term borrowings
10,575
7,087
441
Long-term and subordinated debt
3,017
2,984
3,182
Total Interest Expense
129,912
89,366
17,767
Net Interest Income
156,671
146,973
147,833
Provision for credit losses - loans
2,144
3,295
4,300
(Benefit)
f
/Provision for credit losses - CCL
(628)
404
—
Net Interest Income After Provision for Credit Losses
155,155
143,274
143,533
NONINTEREST INCOME
Fiduciary and wealth management
4,680
5,059
5,071
ATM debit card interchange
3,851
4,019
4,362
Service charges on deposits
2,176
1,943
2,078
Mortgage banking
2,476
1,353
1,607
Mortgage hedging
10
324
1,471
Net gain on sales of SBA loans
347
571
262
Earnings from cash surrender value of life i
f
nsurance
1,141
1,112
1,013
Other
7,812
5,627
7,793
Total Noninterest Income
22,493
20,008
23,657
NONINTEREST EXPENSE
Salaries and employee benefits
f
64,098
59,345
52,601
Software licensing and utilization
9,300
7,927
7,524
Occupa
u
ncy, net
7,571
7,349
6,900
Equipment
4,928
5,121
4,493
Shares tax
2,350
2,713
2,786
Legal and profes
f
sional fees
f
4,306
2,945
2,761
ATM/card processing
2,284
2,108
2,139
Intangible amortization
1,784
1,780
2,012
FDIC Assessment
4,170
3,500
1,594
Loss (Gain) on sale of foreclosed assets, net
80
(144)
(133)
Merger and acquisition
545
5,544
294
Post-acquisition restruc
r
turing
—
2,952
329
Other
16,200
17,448
16,543
Total Noninterest Expense
117,616
118,588
99,843
INCOME BEFORE PROVISION FOR INCOME TAXES
60,032
44,694
67,347
Provision for income taxes
10,595
7,297
12,541
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
$
49,437
$
37,397
$
54,806
PER COMMON SHARE DATA:
Basic Earnings Per Common Share
$
2.90
$
2.29
$
3.44
Diluted Earnings Per Common Share
$
2.90
$
2.29
$
3.44
Weighted-average basic shares outstanding
17,026,240
16,319,006
15,912,877
Weighted-average diluted shares outstanding
17,070,862
16,350,963
15,934,635
,
$
,
$
,
$
,
$
,
The accompanying notes are an integra
g
l part of t
o
hese Consolidat
d ed Financial Sta
S tements.
t
MID PENN BANCORP, INC.
Consolidated Statements of Income
67

Year Ended
December 31,
(In T
I
hous
T
ands)s
2024
2023
2022
Net income
$
49,437
$
37,397
$
54,806
Other comprehensive (loss)/income:
Unrealized (losses)/gains arising dur
d
ing the period on availabl
a e for
f
sale
securities, net of income tax.
(1,550)
1,988
(19,072)
Unrealized holding gains arising during the period on interest rate
derivatives used in cash flo
f w hedges, net of income tax.
665
820
—
Change in defined benefit
f
plans, net of income tax. (1)
723
(212)
(294)
Reclassification adjustment for
f
settlement gains and activity related to
benefit plans, net of income tax. (2)
(26)
(17)
(8)
Total other comprehensive (loss)/income
(188)
2,579
(19,374)
Total comprehensive income
$
49,249
$
39,976
$
35,432
(1)
The change in defined benefit
f
plans consists primarily of unrecognized actua
t
rial (losses) gains on defin
f ed benefit plans during
the period.
(2)
The reclassification adjustment for
f
defined benefit
f
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 the
total noninterest income. See "Note 14 - Postretirement Benefit
f
Plans", to the Consolidated Financial Statements for
f
more
information.
The accompanying notes are an integra
g
l part of t
o
hese Consolidat
d ed Financial Sta
S tements.
t
MID PENN BANCORP, INC.
Consolidated Statements of Comprehensive Income
68

Common Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss) Income
Treasury
Stock
Total
Shareholders'
Equity
(In t
I
housands, exc
e
ept per share dat
d a)
Shares
Amount
Balance, January 1, 2022
16,056,282
$ 16,056
$ 384,742
$ 91,043
$
158
$
(1,923) $
490,076
Net income
—
—
—
54,806
—
—
54,806
Total other comprehensive loss, net of
taxes
—
—
—
—
(19,374)
—
(19,374)
Common stock cash dividends declared -
$0.80 per share
—
—
—
(12,735)
—
—
(12,735)
Riverview restricted stock (1)
—
—
776
—
—
—
776
Repurchased stock (109,891 shares)
—
—
—
—
—
(2,957)
(2,957)
Employee Stock Purchase Plan
7,152
7
193
—
—
—
200
Director Stock Purchase Plan
5,876
6
159
—
—
—
165
Restricted stock activity
25,176
25
1,117
—
—
—
1,142
Balance, December 31, 2022
16,094,486
$ 16,094
$ 386,987
$ 133,114
$
(19,216) $
(4,880) $
512,099
Net income
—
$
—
$
—
$ 37,397
$
—
$
—
$
37,397
Total other comprehensive income, net of
taxes
—
—
—
—
2,579
—
2,579
Common stock cash dividends declared -
$0.80 per share
—
—
—
(12,981)
—
—
(12,981)
Common stock issued to Bruns
r
wick
shareholders (2)
849,510
850
17,245
—
—
—
18,095
Impact of adopting CECL (3)
—
—
—
(11,548)
—
—
(11,548)
Repurchased stock (216,879 shares) (4)
—
—
(37)
—
—
(4,839)
(4,876)
Employee Stock Purchase Plan
13,459
13
290
—
—
—
303
Director Stock Purchase Plan
7,884
8
171
—
—
—
179
Restricted stock activity
33,590
34
1,069
—
—
—
1,103
Balance, December 31, 2023
16,998,929
$ 16,999
$ 405,725
$ 145,982
$
(16,637) $
(9,719) $
542,350
Net income
—
$
—
$
—
$ 49,437
$
—
$
—
$
49,437
Total other comprehensive loss, net of
taxes
—
—
—
—
(188)
—
(188)
Common stock cash dividends declared -
$0.80 per share
—
—
—
(13,822)
—
—
(13,822)
Common stock issuance (5)
2,731,250
2,731
73,225
—
—
—
75,956
Repurchased stock (15,500 shares) (4)
—
—
—
—
—
(323)
(323)
Employee Stock Purchase Plan
19,829
20
418
—
—
—
438
Director Stock Purchase Plan
5,072
5
118
—
—
—
123
Restricted stock activity
41,439
42
1,005
—
—
—
1,047
Balance, December 31, 2024
19,796,519
$ 19,797
$ 480,491
$ 181,597
$
(16,825) $ (10,042) $
655,018
,
,
,
,
,
,
,
(
,
)
(
,
)
( ,
)
( ,
)
,
,
,
,
,
,
,
,
(
,
)
(
,
)
( ,
)
( ,
)
,
,
,
,
,
,
,
,
(
,
)
(
,
)
(
,
)
(
,
)
,
(1)
Additionally, 2,500 shares of restricted stock were paid out in cash resulting in $776 thousand of cash consideration relating to
stock awards.
(2)
Shares issued as a result of the acquisition of Brunswick Bancorp (
r
"Brunswick"). See "Note 2 - Business Combinations", to the
Consolidated Financial Statements for
f
more information.
(3)
The Corporation adopted ASC 326, Financial Instruments - Credit Losses, effe
f ctive January 1, 2023. See "Note 1 - Summary
of Significant Accounting Policies" for fur
f
ther details.
(4)
Includes tax effe
f cts of repurchased stock.
(5)
Shares issued as a result of the underwritten public offe
f ring of 2,375,000 shares of common stock at a price of $29.50 per share
on November 4, 2024.
The accompanying notes are an integra
g
l part of t
o
hese Consolidat
d ed Financial Sta
S tements.
t
MID PENN BANCORP, INC.
Consolidated Statements of Changes in Shareholders’ Equity
69

(In thousands)s
Year Ended
December 31,
2024
2023
2022
Operating Activities:
Net Income
$
49,437
$
37,397
54,806
Adju
d stments to reconcile net income to net cash provided by operating
activities:
Provision for credit losses
1,516
3,699
4,300
Depreciation
4,866
4,900
4,283
Amortization of intangibles
1,784
1,780
2,012
Net amortization of security discounts/pr
/
emiums
397
472
729
Noncash operating lease expense
2,184
1,945
1,755
Amortization of fin
f ance lease right of use asset
179
180
180
Earnings on cash surrender value of life i
f
nsurance
(1,141)
(1,112)
(1,013)
Mortgage loans originated for
f
sale
(113,741)
(82,714)
(138,611)
Proceeds fro
f
m sales of mortgage loans originated for
f
sale
113,008
82,687
149,257
Gain on sale of mortgage loans
(2,476)
(1,353)
(1,607)
SBA loans originated for sale
(4,603)
(11,211)
(5,310)
Proceeds fro
f
m sales of SBA loans originated for sale
4,951
10,640
5,571
Gain on sale of SBA loans
(347)
(571)
(262)
(Loss)/Gain on sale of property, plant, and equipment
(10)
—
938
Loss/(Gain) on sale or write-down of for
f
eclosed assets
80
(144)
(133)
Write-off of bank premises and equipment held for
f
sale
—
—
705
Accretion of subordinated debt
(613)
(587)
(555)
Stock compensation expense
1,047
1,103
1,142
Change in deferred income tax cost/(
t benefit)
1,516
(1,551)
2,262
Fair value adjustment on equity investments
—
—
70
Increase accrued interest receivabl
a e
(1,026)
(6,244)
(7,080)
(Increase)/Decrease in other assets
(4,988)
9,736
(13,261)
(Decrease)/Increase in accrue
r
d interest payable
(773)
10,043
510
Decrease in operating lease liabi
a lity
(2,123)
(2,540)
(3,136)
Increase/(Decrease) in other liabi
a lities
2,264
(4,214)
2,439
Net Cash Provided By Operating Activities
51,388
52,341
59,991
Investing Activities:
Proceeds fro
f
m the sale of availabl
a e-for-sale securities
—
1,751
—
Proceeds fro
f
m the maturity or call of availabl
a e-for-sale securities
33,756
16,611
14,574
Purchases of availabl
a e-for-sale securities
(72,712)
—
(213,976)
Proceeds fro
f
m the maturity or call of held-to-matur
t
ity securities
16,356
10,490
14,942
Purchases of held-to-matur
t
ity securities
—
—
(85,664)
Stock dividends of FHLB and other bank stock
1,288
864
289
Reduction (Purchases) of restricted investment in bank stock
8,019
(9,317)
530
Net cash (paid)/received fro
f
m acquisition
(2,676)
1,068
(901)
Net increase in loans
(190,658)
(424,939)
(411,800)
Purchases of bank premises and equipment
(6,916)
(2,770)
(4,249)
Proceeds fro
f
m the sale of premises and equipment
163
—
220
Proceeds fro
f
m the sale of foreclosed assets
359
1,256
242
Proceeds fro
f
m bank-owned life i
f
nsurance
6,683
774
—
Gain on bank-owned life i
f
nsurance
(2,566)
(125)
—
Net change in investments in tax credits and other partnerships
162
(4,588)
—
Net cash paid on branch sale
—
—
(18,918)
Net Cash Used in Investing Activities
(208,742)
(408,925)
(704,711)
Financing Activities:
Net increase/(Decrease) in deposits
343,715
286,498
(202,607)
MID PENN BANCORP, INC.
Consolidated Statements of Cash Flows
70

Proceeds fro
f
m long-term debt
—
25,000
—
Common stock dividends paid
(13,822)
(12,981)
(12,735)
Proceeds fro
f
m Employee and Director Stock Purchase Plan stock
issuance
561
482
364
Proceeds fro
f
m public offe
f ring of common stock
75,956
—
—
Treasury s
r
tock purchased
(323)
(4,876)
(2,957)
Riverview restricted stock (1)
—
—
776
Net change in finance lease liabi
a lity
(134)
(93)
(90)
Net change in short-term borrowings
(239,532)
138,885
102,647
Long-term debt repayment
(35,266)
(30,449)
(76,771)
Subor
u
dinated debt redemption and trus
r
t preferred securities
—
(10,000)
(16,778)
Net Cash Provided by Financing Activities
131,155
392,466
(208,151)
Net increase/(decrease) in cash and cash equivalents
(26,199)
35,882
(852,871)
Cash and cash equivalents, beginning of period
96,763
60,881
913,752
Cash and cash equivalents, end of period
$
70,564
$
96,763
$
60,881
Suppl
u
emental Disclosures of Cash Flow Information:
Cash paid for interest
$
130,685
$
77,413
$
17,255
Cash paid for income taxes
853
7,965
7,552
Suppl
u
emental Noncash Disclosures:
Recognition of operating lease right of use assets
$
930
$
2,100
$
—
Recognition of operating lease liabi
a lities
930
2,100
1,498
Obsolete Riverview asset write-off
—
—
705
Loans transferred to foreclosed assets held for sale
164
1,362
152
Carrying value of assets sold in branch sale
—
—
2,159
Liabilities assigned in branch sale
—
—
21,076
Fair value of assets acquired in business combination, excluding cash
1,547
362,070
—
Goodwill recorded (1)(2)
1,129
12,800
—
Liabilities assumed in business combination (2)
—
345,043
—
Stock issued in business combination (3)
—
18,095
—
(1)
Includes the impact of the Insurance Acquisition on July 31, 2024. See "Note 2 - Business Combinations" to the Consolidated
Financial Statement for additional infor
f
mation.
(2)
This disclosure includes the impact of the Brunswick Acquisition on May 19, 2023. See "Note 2 - Business Combinations" to
the Consolidated Financial Statements for
f
more information.
(3)
Additionally, 2,500 shares of restricted stock were paid out in cash resulting in $776 thousand of cash consideration relating to
stock awards.
The accompanying notes are an integra
g
l part of t
o
hese Consolidat
d ed Financial Sta
S tements.
t
MID PENN BANCORP, INC.
Consolidated Statements of Cash Flows
71

Notes to Consolidated Financial Statements
Note 1 - Summary of Signific
f ant Accounting Policies
y
g
g
Nature of Operations
f
p
Mid Penn Bancorp, Inc. ("Mid Penn" or the "Corporation"), through operations conducted by Mid Penn Bank (the "Bank")
and its nonbank subs
u
idiaries, engages in a full-service commercial banking and trust business, making availabl
a e 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, construc
r
tion fin
f ancing, farm loans, community development
loans, loans to non-profit
f
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, certific
f ates of deposit, and
Individual Retirement Accounts ("IRA"). In addition, the Bank provides a full range of trus
r
t and wealth management
services through its Trus
r
t Department. Deposits are insured by the Federal Deposit Insurance Corpor
r
ation ("FDIC") to the
extent provided by law.
Mid Penn also ful
f fills the insurance needs of both existing and potential customers through MPB Risk Services, LLC,
doing business as MPB Insurance and Risk Management.
The fin
f ancial services are provided to individuals, partnerships, non-profit
f
organizations, and corporations through its retail
banking offi
f ces located in throughout Pennsylvania and two counties in New Jersey.
Basis o
i
f P
o
resentation
f
For all periods presented, the accompanying Consolidated Financial Statements include the accounts of Mid Penn Bancorp,
r
Inc., its wholly-owned subs
u
idiary, Mid Penn Bank, and fiv
f e wholly-owned nonbank subs
u
idiaries, MPB Realty, LLC, MPB
Financial Services, LLC, which includes MPB Wealth Management, LLC (which ceased operating dur
d
ing the first quarter
of 2024) and MPB Risk Services, LLC, and MPB Launchpad Fund I, LLC. As of December 31, 2024, the accounts and
activities of these nonbank subs
u
idiaries were not material to warrant separate disclosure or segment reporting. As a result,
Mid Penn has only one reportabl
a e segment for fin
f ancial reporting purpos
r
es. All material intercompany accounts and
transactions have been eliminated in consolidation.
For comparative purpos
r
es, the December 31, 2023 and December 31, 2022 balances have been reclassified, when
necessary, to confor
f
m to the 2024 presentation. Such reclassifications had no impact on net income or total shareholders’
equity. In the opinion of management, all adju
d stments necessary for fai
f r presentation of the periods presented have been
reflected in the accompanying consolidated financial statements. All such adjustments are of a normal, recurring nature.
Mid Penn has evaluated events and transactions occurring subs
u
equent to the balance sheet date of December 31, 2024 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.
The accounting and reporting policies of Mid Penn confor
f
m with accounting principles generally accepted in the United
States ("GAAP") and to general practice within the financial industry.
r
Following is a description of the more significant
accounting policies.
Use of E
o
st
E imates
f
- The preparation of financial statements in confor
f
mity with U.S. GAAP requires management to make
estimates and assumptions that affe
f ct the reported amounts of assets and liabi
a lities and disclosure of contingent assets and
liabi
a lities 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 fro
f
m those estimates.
Signi
i
fic
i
ant Group of Concentrations of Credit Risk
i
g f
p f
f
- Most of hthe Corpor
r
ation’s activities are
i
wi hth customer l
s locat d
ed
i
wi hthin
Pennsylylva ini .a "Note 3 - Investment Secu iri ities" didiscusses the ytypes of i
f investment secu iri itie
i
s in whihi h
ch hthe Corpor
r
ation
invests. "Note 4 - Loans and Allllowance for
f
Loan Losses d
" discusses the ytypes of l
f lendidi g
ng hthat hthe Corpor
r
ation e g
ngage i
s in as
wellll as loan concentrations. The Corporatio d
n does not have a sigig inifificant concentration of credidit risk wi h
ith any one customer.
Fair Value Mea
M
surementst -
h
The Corpor
r
ation uses estimates of fair valu i
e in a
l
ppl
a
yiyi g
ng va irious accounting sta d
nda d
rds for
f
its
cons lolididat d
ed fifinancial statements on ei h
ither a recu i
rri g
ng or non-recu i
rri g
ng ba isis. Fair valu i
e i d
s defin
f
d
ed as hthe p irice to sellll an
asset or transfer a lili b
abili
ili yty in an orde lrly transac ition between willi
illing a d
nd b
able ma k
rket participants. The Corporatio g
n groups
MID PENN BANCORP, INC.
72

its assets and l
d liabibi
a lilities measur d
ed at fair valu i
e in three hihierar h
chy l
y lev lels, based on the b
observabibi
a lity
lity and transparency of the
inputs.
In certain cases, hth
i
e inputs used to measure f iai
f r v lalue may f lal
f l i
l int
d
o dififfe
f rent levels of hthe f iai
f r v lalue hihierar h
chy. In su h
ch
cases, the level i
l in the fair valu h
e hierarchy
hy
i
wi hthin
h
which the fair value measuremen i
t i i
n its en itirety f lal
f ls ha b
s bee d
n deter i
min d
ed
ba
based on the lowest level i
l input hthat is isigni
gnifificant to hthe f iai
f r v lalue measuremen i
t i i
n its en itirety. It is hthe Corpor
r
ation’s p lolicy
to ma ixi i
mize the use of observablbl
a
i
e inputs a d
nd
i
mi ini i
mize the use of u
b
nobservablbl
a
i
e input
i
s in estima iting f iai
f r v lalue.
Un b
observablbl
a
i
e inputs are utililiz d
ed in determining f iai
f r v lalue es itimates o lnly to the extent hthat
b
observablbl
a
i
e inputs are not
av iailablbl
a e.
h
The need to use
b
unobservablbl
a
i
e input
g
s gener lallyly results fro
f
m a la k
ck of ma k
rket liliq iuididi yty and tradidi g
ng
l
volume.
Tran fsfer
f
b
s between levels f
of fair valu h
e hierarchy
hy are reco d
rd d
ed at hthe e d
nd f
of hthe repor iting period.
Cash and Cash Equivalentst
q
- For purpos
r
es of the Consolidated Statements of Cash Flows, cash and cash equivalents
include cash on hand, balances due fro
f
m banks, and federal funds
f
sold, all of which matur
t
e within ninety days.
Restri
t ctions on Cash and Due fro
f
m Bank Accountst
f
- The Bank is required by banking regulations to maintain certain
minimum cash reserves. As of both December 31, 2024 and 2023, there was no cash reserve balances required to be
maintained at the Federal Reserve Bank of Philadelphia because the Bank had sufficient vault cash availabl
a e.
Debt Investment Sec
S
urities -
i
Mid Pen d
n deter i
mines hthe cla i
ssi ifica ition of investment secu iri ities at hthe time of pur h
chase. If
i
Mid
Penn has the intent and the b
ability
ility at hthe time of pur h
chase t h
o h lold d
d d b
ebt secu iri ities untilil matu iri yty, they are lclas isififi d
ed as heldld-
to-matur
t
ity
ity ("HTM"). HT
i
M investment secu iri ities are stat d
ed at amor itiz d
ed cost. D b
ebt secu iri ities Midid Penn does not inte d
nd to
h l
hold to matur
t
ity are
lclas isififi d
ed as availilablbl
a e for
f
sale ("AFS") a d
nd car iri d
ed at es itimated f
d f iai
f r v lalue
i
wi hth unr
l
ealiz d
ed gains or
losses reported as a separate component of stockh l
kholders’ e
i
qui yty in accumulated o hther comprehensiv i
e incom (
e (lo )
ss), net of
ap lplic b
able income taxes. Av iailablbl
a e for
f
sale secu iri ities are a part of Midid Penn’s asse /li
t/liabibi
a lity
lity management strategy
gy and m y
ay
be
be soldld in response to cha g
nge
i
s i
i
n interest rates, prepayment risk or o hther ma k
rket factors. Management has elect d
ed to
re lclas isi y
fy re laliz d
ed gains a d
nd losses from accumulated o hther comprehensiv i
e income when secu iri ities are soldld on hthe trade
date.
Interest income and d
d divididends on secu iri ities are recogni
gni
d
zed in interest income on an accrua
r
l b
l basis. Pre i
miums and d
d discounts
on debt secu iri ities are amor iti
d
zed as an d
adjuju
d stment to interest income over the pe iri d
od to matu iri yty of hthe r lelat d
ed secu iri yty using
hthe effectiv
i
e interest meth d
hod. Re laliz d
ed gains o
l
r losses on the sale of secu iri ities are determin d
ed using the specifific
f
ididen if
tific
f ation meth d
hod.
ASC 326, Financial Instrum
r
ents-Credit Losses, was adopted by Mid Penn on January 1, 2023. ASC 326 introduced the
CECL methodology for estimating allowances for credit losses. ASC 326 applies to all financial instrum
r
ents carried at
amortized cost, including HTM securities, and makes targeted improvements to the accounting for
f
credit losses on AFS
securities.
In order to comply with ASC 326, Mid Penn conducted a review of its investment portfol
f io and determined that for certain
classes of securities it would be appr
a
opriate to assume the expected credit loss to be zero. This zero-credit loss assumption
applies to debt issuances of the U.S. Treasury a
r
nd agencies and instrum
r
entalities of the United States government. The
reasons behind the adoption of the zero-credit loss assumption are as follows:
•
High credit rating
•
Long history w
r
ith no credit losses
•
Guaranteed by a sovereign entity
•
Widely recognized as "risk-free rate"
•
Can print its own currency
•
Currency is routinely held by central banks, used in international commerce, and commonly viewed as reserve
currency
•
Currently under the U.S. Government conservatorship or receivership
MID PENN BANCORP, INC.
73

Mid Penn will continuously monitor any changes in economic conditions, credit downgrades, changes to explicit or
implicit guarantees granted to certain debt issuers, and any other relevant infor
f
mation that would indicate potential credit
deterioration and prompt Mid Penn to reconsider its zero-credit loss assumption.
At the date of adoption, Mid Penn’s estimated allowance for credit losses on AFS and HTM securities under ASC 326 was
deemed immaterial due to the composition of these portfol
f ios. Both portfol
f ios consist primarily of U.S. government agency
guaranteed mortgage-backed securities for
f
which the risk of loss is minimal. Therefor
f
e, Mid Penn did not recognize a
cumulative effect adjustment through retained earnings related to the AFS and HTM securities.
AFS Securitie
i
s
ASC 326, Financial Instrum
r
ents-Credit Losses, made targeted improvements to the accounting for
f
credit losses on AFS
securities. The concept of other-than-temporarily impaired has been replaced with the allowance for
f
credit losses. Unlike
HTM securities, AFS securities are evaluated on an individual level and pooling of securities is not allowed.
Quarterly, Mid Penn evaluates if any security has a fair value less than its amortized cost. Once these securities are
identifie
f d, in order to determine whether a decline in fai
f r value resulted fro
f
m a credit loss or other fact
f
ors, Mid Penn
performs fur
f
ther analysis as outlined below:
•
Review the extent to which the fair value is less than the amortized cost and observe the security’s lowest credit
rating as reported by third-party credit ratings companies.
•
The securities that violate the credit loss triggers above would be subjected to additional analysis that may include,
but are not limited to: changes in market interest rates, changes in securities credit ratings, security type, service
area economic factors, financial performance of the issuer/o
r r obligor of the underlying issue and third-party
guarantee.
•
If Mid Penn determines that a credit loss exists, the credit portion of the allowance will be measured using a DCF
analysis using the effe
f ctive interest rate as of the security’s purchase date. The amount of credit loss Mid Penn
records will be limited to the amount by which the amortized cost exceeds the fair value.
The DCF analysis utilizes contractua
t
l matur
t
ities, as well as third-party credit ratings and cumulative defau
f
lt rates published
annually by a reputable third-party.
At December 31, 2024, the results of the analysis did not identify any securities that violate the credit loss triggers;
therefor
f
e, no DCF analysis was performed and no credit loss was recognized on any of the securities availabl
a e for
f
sale.
Accrue
r
d interest receivabl
a e is excluded fro
f
m the estimate of credit losses for
f
AFS securities. At December 31, 2024,
accrue
r
d interest receivabl
a e totaled $1.2 million for
f
AFS securities and was reported in accrue
r
d interest receivabl
a e on the
accompanying Consolidated Balance Sheet.
HTM S
T
ec
S
uritie
t s
ASC 326, Financial Instrum
r
ents-Credit Losses, requires institutions to measure expected credit losses on fin
f ancial assets
carried at amortized cost on a collective or pool basis when similar risks exist. Mid Penn uses several levels of
segmentation in order to measure expected credit losses:
•
The portfol
f io is segmented into agency and non-agency securities.
•
The non-agency securities are separated into state and political subdi
u
vision obligations and corpor
r
ate debt
securities.
Each individual segment is categorized by third-party credit ratings.
As discussed above
a
, Mid Penn has determined that for certain classes of securities it would be appr
a
opriate to assume the
expected credit loss to be zero, which include debt issuances of the U.S. Treasury a
r
nd agencies and instrum
r
entalities of the
United States government. This assumption will be reviewed and attested to quarterly.
At December 31, 2024, Mid Penn’s HTM securities totaled $382.4 million. Afte
f r appl
a
ying appropriate probabi
a lity of
default and loss given defau
f
lt assumptions, the total amount of current expected credit losses was deemed immaterial.
Therefor
f
e, no reserve was recorded at December 31, 2024.
MID PENN BANCORP, INC.
74

Accrue
r
d interest receivabl
a e is excluded fro
f
m the estimate of credit losses for
f
HTM securities. At December 31, 2024,
accrue
r
d interest receivabl
a e totaled $1.8 million for
f
HTM securities and was reported in accrued interest receivabl
a e on the
accompanying Consolidated Balance Sheet.
At December 31, 2024, 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 December 31, 2024.
Equity Securities
q
y
-
h
The Corpor
r
ation reports its eq iui yty secu iri ities with r
d
eadilily d
y deter i
minablbl
a e f iai
f r v lalues at f iai
f r v lalue on hthe
Cons lolididat d
ed Balance Sheet, wi h
ith re laliz d
ed and unr
l
ealiz d
ed gains a d
nd losses reported i
d in o hther expense on the Cons lolididat d
ed
Statements of Income. As of Dece b
mber 31, 2024 and 2023, Midid Penn’s e
i
qui yty secu iri ities consisted of Commu ini yty
Reinvestment Act f
d
unds
f
totalili g
ng $428 hthousand and $438 hthousand, respectiv lely. No equity securities were sold during the
years ended December 31, 2024, 2023 and 2022.
Federal Hom
H
e Loan Bank ("FH
"
LB
H
") and Atlantic Community Banker
k
s'
r
Bank ("AC
"
BB"
C
) S
"
to
S ck
(
)
y
(
)
-
h
The Bank i
k is a me b
mber of
hthe FHLB a d
nd hthe ACBB and i
d is req iuired to m iaint iain a i
n investment in hthe sto k
ck of hthe FHLB a d
nd ACBB. No ma k
rket e ixists
for these stocks, a d
nd hthe Bank’ i
s investment ca
b
n b
l
e liq iuidated o lnly through
ough redemp itio
b
n by the FHLB or ACBB, at hthe
didiscre ition of a d
nd subjbj
u ect to c
di
ondi itions impos d
ed by
by
hthe FHLB a d
nd ACBB.
i
Historic lallyly, FHLB a d
nd ACBB stock
redemp itions have been at cost (par valu )e), whihi h
ch equals hthe Corpor
r
ation’s car y
rying v lalue. The Corporation m
i
onitors its
investment in FHLB and ACBB sto k
ck fo i
r imp iairment through
gh re iview of recent fin
f an ici lal results of hthe FHLB a d
nd ACBB
in lcl di
udi g
ng capit lal
d
adequa y
cy and l
d liq iuididi yty position, didi ivide d
nd paymen h
t histo y
ry, r d
edemptio
h
n histo y
ry and i
d infor
f
ma ition fro
f
m
cr d
edit
g
agen icies. The Corporatio
h
n has not ididen itififi d
ed any i
y i di
ndicators of imp iairment of FHLB or ACBB stock. During the
years ended December 31, 2024, 2023, and 2022 dividends received from the FHLB totaled $1.3 million, $864 thousand,
and $289 thousand respectively.
Investment in Limited Partnersh
r
ip - Mid Penn is a limited partner in a partnership that provides low-income housing in
Enola, Pennsylvania. The carrying value of Mid Penn’s investment in the limited partnership was zero at December 31,
2024 and $15 thousand at December 31, 2023, net of amortization, using the proportional amortization method and is
reported in other assets on the Consolidated Balance Sheets. Mid Penn’s maximum exposure to loss is limited to the
carrying value of its investment.
Mid Penn also owns a limited partnership interest in a low-income housing proje
o ct to construc
r
t thirty-seven apa
a
rtments and
common amenities in Dauphi
u
n County, Pennsylvania. The total investment in this limited partnership, net of amortization,
was $3.7 million and $4.5 million on December 31, 2024 and December 31, 2023, respectively, and was included in the
reported balance of other assets on the Consolidated Balance Sheet. All of the units qualifie
f d for
f
Federal Low-Income
Housing Tax Credits ("LIHTCs") as provided for
f
in Section 42 of the Internal Revenue Code of 1986, as amended. Mid
Penn’s limited partner capital contribution commitment was $7.6 million, and the investment was ful
f ly funded within a
three-year period beginning in 2020 and ending during the first quarter of 2021. The investment in the limited partnership
is reported in other assets on the Consolidated Balance Sheet and is being amortized over a ten-year period using the
proportional amortization method which began upon
u
commencement of operations of the faci
f
lity in December 2021. The
project was for
f
mally awarded $8.5 million in total LIHTCs by the Pennsylvania Housing Finance Agency, which will be
recognized over the ten-year period fro
f
m December 2021 through November 2029. Mid Penn received low-income
housing tax credits related to this proje
o ct of $2.2 million for
f
the tax year ended December 31, 2024, $1.3 million for the tax
year ended December 31, 2023, and $853 thousand for
f
the tax year ended December 31, 2022. Mid Penn’s maximum
exposure to loss is limited to the carrying value of its investment.
Mid Penn is a limited partner in a partnership that provides low-income housing in Mechanicsburg, Pennsylvania. The
total investment in this limited partnership, net of amortization, was $9.7 million at December 31, 2024 and $8.9 million at
December 31, 2023, respectively, and was included in other assets on the Consolidated Balance Sheet. All of the units
qualifie
f d for
f
Federal Low-Income Housing Tax Credits ("LIHTCs") as provided for
f
in Section 42 of the Internal Revenue
Code of 1986, as amended. The investment in the limited partnership is being amortized over a ten-year period using the
proportional amortization method which began upon
u
commencement of operations of the faci
f
lity in December 2023. The
project was for
f
mally awarded $12.0 million in total LIHTCs by the Pennsylvania Housing Finance Agency, which will be
recognized over the ten-year period fro
f
m December 2023 through November 2033. Mid Penn received low-income
housing tax credits related to this proje
o ct of $1.1 million for the tax year ended December 31, 2024, and zero for
f
the tax
year ended December 31, 2023, Mid Penn’s maximum exposure to loss is limited to the carrying value of its investment.
MID PENN BANCORP, INC.
75

Mid Penn also owns a limited partnership interest in a low-income housing proje
o ct to construc
r
t/rehabilitate seventeen
apartments and two commercial shops in Schuylkill County, Pennsylvania. The total investment in this limited partnership,
net of amortization, was $3.1 million and $3.3 million on December 31, 2024 and December 31, 2023, respectively, and
was included in the reported balance of other assets on the Consolidated Balance Sheet. All of the units qualified for
Federal Low-Income Housing Tax Credits ("LIHTCs") as provided for in Section 42 of the Internal Revenue Code of 1986,
as amended. Mid Penn’s limited partner capital contribution commitment was $4.4 million, and the investment was ful
f ly
funded within a three-year period beginning in 2020 and ending during the first quarter of 2023. The investment in the
limited partnership is reported in other assets on the Consolidated Balance Sheet and is being amortized over a 10-year
period using the proportional amortization method which began upon commencement of operations of the fac
f
ility in 2023.
The proje
o ct was for
f
mally awarded $4.8 million in total LIHTCs by the Pennsylvania Housing Finance Agency, which will
be recognized over the ten-year period from December 2023 through November 2033. Mid Penn received low-income
housing tax credits related to this proje
o ct of $484 thousand for
f
the tax years ended December 31, 2024, and 2023,
respectively. Mid Penn’s maximum exposure to loss is limited to the carrying value of its investment.
Loans Heldld fofor S lal
S e
f
- Du iri g
ng hthe thihi d
rd quarter of 2021, hthe Corpor
r
ation m d
ade the lelection to measure mor gtg g
ag l
e loans heldld
for s lale at f iai
f r v lalue. Derivative fin
f an ici lal instruments r lelat d
ed to mortgage ba ki
nki g
ng activi i
ities are lalso reco d
rd d
ed at fair value,
as detaililed u d
nder the he d
ading "Mortgage Ba ki
nki g
ng De iriva itive
i
Financial Instrum
r
ents," below.
h
The Corpor
r
atio
d
n deter i
mines
fair value for
f
its mortgage loan h
s h leld f
d for
f
sale based on the price that seco d
nda y
ry ma k
rket investors w
l
ould p y
ay for loans wi h
ith
isi il
milar characteris itics i
, includidi g
ng interest rate and term, as of hth d
e date f iai
f r v lalue is measur d
ed. Cha g
nge i
s in f iai
f r v lalue d
s dur
d
ing
hthe period are reco d
rd d
ed as components of mor gtg g
ag b
e bankiki g
ng income on hthe Cons lolididat d
ed Statements of Income. Interest
income earned on mor gtg g
ag l
e loans heldld for s lal i
e is cla i
ssififi d
ed in interest income on hthe Cons lolididat d
ed Statements of Income.
Loans - Loans that management has the intent and ability to hold for
f
the for
f
eseeable future are reported at their outstanding
principal balances, net of an allowance for
f
loan losses, unamortized deferred fees
f
and costs and unamortized premiums or
discounts.
h
The net amount of nonref
d
unda
f
blbl
a
l
e loan o irigigina ition fees and certain didirect costs asso iciat d
ed
i
wi hth hth
l
e lendidi g
ng
process are deferred a d
nd amor itiz d
ed to interest income over the contractua
t
l l
l lives of hth
l
e loans using meth d
hods
h
which
appr
i
oximate hth
l
e lev lel yiyi leld meth d
hod.
i
Discounts a d
nd premiums are amortiz d
ed or accret d
ed to interest income over the
es itimated term of the loans u isi g
ng me hth d
ods hthat appr
i
oximate hth l
e lev lel yiyi leld meth d
hod. Interest income on loan i
s is accrue
r
d
ba
based on the unpaidid prin icipal b
l b lalance outstandidi g
ng and the contractua
t
l terms of hth l
e loan agreements.
A s b
ubstantial por ition of hth l
e loan portf lol
f io is comp irised of commercial a d
nd re lal estate loans throughout
oughout Pennsylylva inia.
h
The
b
abili
ility of the Corporation’ d
s d b
ebtors to honor hth ieir contract i
s i d
s dependent upon hth g
e gener lal economic co di
ndi itions of hthis area.
h
Th
l
e loan portf lol
f io is segmented i
d into commercial r
l
eal estate loans, commercial a d
nd industrial l
l loans, construc
r
itio
l
n loans,
re isidential mor gtg g
ag
l
e loans, a d
nd consumer loans. Commer ici lal and i
d i d
ndustrial l
l loans are u d
nderw iritten after ev lalua iti g
ng and
d
understa di
ndi g
ng hth b
e borrower’s b
abilility
ity to repay the loan hthrough
ugh opera iting profifitablbl
a y a d
nd effe
f ctiv lely g
y gro i
wi g
ng it b
s business.
h
The Corpo
r
ra ition’s man g
agement exa i
mines current and projeje
o ct d
ed cash f
h flo
f ws to determine the b
ability
ility of hth b
e borrower to repay
hth ieir oblbligigations as
g
agre d
ed. Commercial l
l loans are p irima irilyly made based on the cr d
edit quality
lity and cash f
h flo
f ws of hthe
bor
borrower a d
nd seco d
nda irilyly on hthe u d
nde lrlyiyi g
ng collllater lal pr
i
ovided b
d by the borrower.
h
The cash f
h flo
f ws of borrowers h
, however,
may not be as expect d
ed a d
nd hthe c lollateral secu iri g
ng hthes l
e loans may flu
f ctua
t
te in value. Most commercial l
l loans are secur d
ed
by
by hthe assets being fin
f an
d
ced or othe b
r business assets such as accounts r
i
eceivablbl
a e o i
r inventory a
r
d
nd may i
y incorpo
r
rate a
personal g
l guarantee to d
add strength to the cr d
edit and r d
educ
d
e the iri k
sk on a transaction to an acceptablbl
a
l
e lev lel h
; however, some
h
short-term loans m y
ay be made on an unsecured b
d basis to hthe most credidit wor hthy b
y borrowers.
Commercial real estat l
e loans are subj
ubject to
d
underw iri iti g
ng standa d
rds a d
nd processes si il
imilar to commercial l
l loans. Commercial
re lal estate le di
ndi g
ng yty ipicalllly i
y inv lolve h
s higighe l
r loan p irincip lal amounts a d
nd hthe rep y
ayment of hthes l
e loans is generalllly l
y largelyly
depe d
ndent on hthe successf lul
f
opera ition of the proper yty secu iri g
ng hth l
e loan or the business c
d
onducted on the property securing
hth l
e loan.
i
Wi hth respect to loans t
d
o dev lelopers and b
d b iuildlders, hthe Corpor
r
atio
g
n gener lallyly re
i
quires the borrower t
h
o have a proven record
of success a d
nd an expertis
i
e in the b i
buildlding i
g i d
ndustry.
r
Construc
r
itio
l
n loans are u d
nderw iritten u ili
tilizing feas
f
ibibili
ili yty st di
udi
t
es,
indepe d
ndent appr iaisal reviews, sen isi itivity
ity an lalysis of
b
absorp ition a d
nd lease rates and f
d fin
f an ici lal an lalysis of hth
d
e dev lelopers
and property owners. Construc
r
itio
l
n loans ar
g
e gener lallyly based upon
u
es itimates of costs and v lalue asso iciat d
ed
i
wi hth hthe
complete projoject. These es itimates m y
ay be inaccurate. Construc
r
itio
l
n loans ofte
f
i
n i
l
nvolve hth
d
e disbursement of subs
u
tantial
fu d
nds
i
wi hth repayment s b
ubstantially
lly depe d
ndent on hthe success of the lul itimate projoject.
MID PENN BANCORP, INC.
76

h
The Corpo
r
ra ition’s non-re lal estate consumer loans are based on the borrower’s proven ear ini g
ng cap
i
aci yty over the term of hthe
loan. The Corporation m
i
onitors payment performance pe iri di
odically
lly for consumer loans t
i
o identifify a
f
y
ny dete irioratio
i
n in the
bor
borrower’s fifinancial strength. To mo initor a d
nd manage consumer loan iri k
sk, p lolicies a d
nd proc d
edur
d
es ar
d
e dev leloped a d
nd
modidififi d
ed, as n
d
eed d
ed, j
, j iointlyly by
by management and staff. T
f
hihis activity
ity, c
l
oupl d
ed
i
wi hth a r lelativ lely smallll
l
volume of consumer
loans,
i
minimizes iri k
sk.
Acquired Loans
q
- 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
t
. Mid Penn may also consider external credit rating agency ratings for borrowers and for
f
non-commercial loans,
FICO score or band, probabi
a lity of defau
f
lt levels, and number of times past due
d
. At the purchase or acquisition date, the
amortized cost basis of PCD loans is equal to the 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 o
f
f 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 contractua
t
l life o
f
f the individual loan.
Loans are charged off against the ACL, with any subsequent recoveries credited back to the ACL account. Expected
recoveries may not exceed the aggregate of amounts previously charged off and expected to be charged off.
There were no loans acquired for
f
the year ended December 31, 2024. Loans acquired in the Brun
r
swick acquisition,
included in the balance of loans, net of unearned interest, on the Consolidated Balance Sheets for
f
December 31, 2023
totaled $324.5 million.
Non-accrual Loans -
h
The Corpor
r
ation cla i
ssi ifies loans as pas d
t due
d
h
when hthe p y
ayment of prin icipal o i
r interes i
t i g
s greater hthan
30 days delilinquent based on the contractua
t
l next p y
ayment due date. The Corporation’s p lolicies r lelat d
ed to
h
when loans are
plpl
d
aced on non-accrua
r
l status confor
f
m t
g
o g iuidelilines presc iribed b
d by r g
eg lulatory a
r
uthori i
ities. Loans are
lpl
d
aced on non-accrua
r
l
status
t
h
when it is pr b
obablbl
a e that p irincip lal or interest is not fulllly c lollectibible, o g
r gener lallyly
h
when prin icipal o i
r interes b
t becomes
90 days past due, whihi h
chever occurs fifirst.
h
When loans are
lpl
d
aced on non-accrua
r
l status, interest re
i
ceivablbl
a
i
e is reversed
g
ag iains i
t interes i
t incom i
e in the current pe iri d
od and amortization of a y
ny didiscount ceases. Interest p y
ayments r
i
eceived thereafte
f r
are a
l
ppl
a
ied as a reduc ition to the remaining p irincip lal balance u lnless man g
agemen b
t b lelieves that the lul itimate collllection of the
prin icipal i
l i l
s likik lely, in
h
which case p y
ayments are recogni
gnized i
d in ear ini g
ngs on a cash b
h basis. Loans are removed f
d fro
f
m non-accrua
r
l
status
t
h
when hth y
ey become current as to both p irincip lal and i
d interest a d
nd hthe c lollect b
ability
ility of prin icipal a d
nd interest is no lo g
nger
d
b
doubtful.
Generally
lly, a non-accrua
r
l l
l loan tha i
t is restruc
r
tured rem iains on non-accrua
r
l f
l for
f
a reasonablbl
a e period of time (g
(gener lallyly, a l
t least
isix consecu itive months) t
d
o demonstrate the borrower can meet hthe restruc
r
tured terms. However, performance prior to the
restructur
t
ing, or isigni
gnifificant events hthat coin icide
i
wi hth hthe restruc
r
tu iri g
ng, are considider d
ed in asse i
ssi g
ng
h
whether the borrower
can meet hthe new terms a d
nd may res lul i
t in the loan being retur
t
ned to accrua
r
l status after a shorter performance pe iri d
od. If hthe
bor
borrower’s b
abilility to meet the re ivised p y
ayment sched l
dul i
e is not reasonablbl
a y assured, hth l
e loan rem iains lclas isififi d
ed as a non-
accrua
r
l l
l loan.
Modific
i
ations to Borrowers Expe
x
riencing Financial Diffi
f culty
f
p
g
fff
y - From time to time, we may modify certain loans to
borrowers who are experiencing financial diffi
f culty. In some cases, these modifications may result in new loans. Loan
modifications to borrowers experiencing financial diffi
f culty may be in the for
f
m of principal forgiveness, an interest rate
reduction, an other-than-insignificant payment delay, or a term extension, or a combination thereof, a
f
mong other things.
Allowance for
f
Credit Losses
f
- Mid Penn’s ACL - loans methodology is based upon
u
guidance within FASB ASC Subtopic
326-20, as well as regulatory g
r
uidance fro
f
m the FDIC, its primary federal regulator. The ACL - loans is a valuation
account that is deducted fro
f
m the loans’ amortized cost basis to present the net amount expected to be collected on the
loans. Credit quality within the loan portfol
f io is continuously monitored by management and is reflected within the ACL -
MID PENN BANCORP, INC.
77

loans. The ACL - loans is an estimate of expected losses inherent within Mid Penn’s existing loan portfol
f io. The ACL -
loans is adjusted through the PCL and reduc
d
ed by the charge off of loan amounts, net of recoveries.
The loan loss estimation process involves procedur
d
es to appropriately consider the unique characteristics of Mid Penn’s
loan portfol
f io segments. When computing allowance levels, credit loss assumptions are estimated using a model that
categorizes loan pools based on loss history a
r
nd other credit trends and risk characteristics, including current conditions
and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts about the fut
f ur
t
e. Evaluations of the portfol
f io and individual credits are inherently
subj
u ective, as they require estimates, assumptions and judgments as to the fact
f
s 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 fut
f ur
t
e periods, evaluations of the overall loan portfol
f io, in light of the fact
f
ors and
forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.
Mid Penn estimates the ACL using relevant availabl
a e infor
f
mation, from internal and external sources, relating to past
events, current conditions and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts. 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 fac
f
tors
affe
f cting Mid Penn as a whole, as well as specific loans. Factors considered include the fol
f lowing: 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 reasonabl
a e
and supportabl
a e for
f
ecasts.
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
f
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
f
such individual loans. In estimating the ACL for
f
the collective
component, loans are segregated into loan pools based on loan purpos
r
e codes and similar risk characteristics.
The commercial real estate and residential mortgage loan portfol
f io segments include loans for
f
both commercial and
residential properties that are secured by real estate. The underwriting process for
f
these loans includes analysis of the
financial position and strength of both the borrower and, if applicable, guarantor, experience with similar proje
o cts in the
past, market demand and prospects for
f
successful
f
completion of the proposed project within the established budget and
schedule, values of underlying collateral, availabi
a lity 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
u
analytical tools that consider historical and proje
o cted cash flo
f ws and
performance, in addition to analysis of the proposed project for income-producing properties. Additional support offer
f ed 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.
The commercial and industrial loan portfol
f io segment includes commercial loans made to many types of businesses for
f
various purpos
r
es, such as short-term working capital loans that are usually secured by accounts receivabl
a e and inventory,
r
equipment and fixed asset purchases that are secured by those assets, and term financing for
f
those within Mid Penn’s
geographic markets. Mid Penn’s credit underwriting process for
f
commercial and industrial loans includes analysis of
historical and proje
o cted cash flows and performance, evaluation of fin
f ancial strength of both borrowers and guarantors as
reflected in current and detailed fin
f ancial information, and evaluation of underlying collateral to support the credit.
The consumer loan portfol
f io segment is comprised of loans which are underwritten after evaluating a borrower’s capa
a
city,
credit and collateral. Several fac
f
tors 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
a
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 downtur
t
ns 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
f
credit losses for
f
loan pools. The
DCF is based off o
f
f 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 flo
f ws at the individual loan level. Contractua
t
l cash flo
f ws based on loan terms are adjusted for
f
PD, LGD and
prepayments to derive loss cash flo
f ws. These loss cash flows are discounted by the loan’s coupon rate to arrive at the
MID PENN BANCORP, INC.
78

discounted cash flow based quantitative loss. The prepayment studies are upda
u
ted quarterly by a third-party for each
applicable pool.
Mid Penn determined that reasonabl
a e and suppor
u
tabl
a e for
f
ecasts could be made for
f
a twelve-month period for
f
all of its loan
pools. To the extent the lives of the loans in the LHFI portfol
f io extend beyond this forecast period, Mid Penn uses a
reversion period of four
f
quarters and reverts to the historical mean on a straight-line basis over the remaining life o
f
f the
loans.
Qualitative fact
f
ors used in the ACL methodology include the fol
f lowing:
•
Lending process
•
Concentrations of credit
•
Peer Group Divergence
The ACL for individual loans, such as non-accrua
r
l and PCD, that do not share risk characteristics with other loans is
measured as the diffe
f rence between the discounted value of expected future cash flo
f ws, 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 diffe
f rence between the
loan’s net realizable value and its amortized cost basis (net of previous charge-offs and defer
f red loan fee
f
s and costs),
except for
f
collateral-dependent loans. A loan is collateral dependent when the borrower is experiencing financial diffi
f culty
and repayment of the loan is expected to be provided subs
u
tantially through the sale of the collateral. The expected credit
loss for collateral-dependent loans is measured as the diffe
f rence between the amortized cost basis of the loan and the fair
value of the collateral, adjusted for
f
the estimated cost to sell. Fair value estimates for
f
collateral-dependent loans are derived
from appr
a
aised 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
ofte
f n if market conditions necessitate. Appraisals are obtained fro
f
m state-certifie
f d appr
a
aisers and are based on certain
assumptions, which may include construc
r
tion 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 acceptabl
a e, and values are adju
d sted
down for
f
costs associated with asset disposal. If the calculated expected credit loss is determined to be permanent or not
recoverabl
a e, 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 nonaccrua
r
l status. Mid Penn may also consider external credit
rating agency ratings for borrowers and for
f
non-commercial loans, FICO score or band, probabi
a lity 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
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 o
f
f 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 contractua
t
l life o
f
f the individual loan.
Loans are charged off against the ACL, with any subsequent recoveries credited back to the ACL account. Expected
recoveries may not exceed the aggregate of amounts previously charged off and expected to be charged off.
Premises and Equipm
i
ent
q p
- Land is carried at cost. Buildings, fur
f
niture, fix
f tures, equipment, land improvements, and
leasehold improvements are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line
method over the estimated useful lives of the assets. Building assets are depreciated using an estimated useful life o
f
f fiv
f e to
fifty years. Furnitur
t
e, fixtur
t
es, and equipment are depreciated using an estimated useful life o
f
f three to ten years. Land
improvements are depreciated over an estimated useful life o
f
f ten to twenty years. Leasehold improvements are depreciated
using an estimated useful life t
f
hat is the lesser of the remaining life o
f
f the lease or ten to fifteen years. Maintenance and
MID PENN BANCORP, INC.
79

normal repairs are charged to expense when incurred, while major additions and improvements are capitalized. Gains and
losses on disposals are reflected in current operations.
h
The Corpo
r
ra ition reviews hthe car y
rying v lalue of lo g
ng-liliv d
ed assets and certain ididen if
tifia
f blbl
a
i
e intangigiblbles fo
i
r imp iairment
h
whenever events a d
nd h
change i
s in circumstances indidicate that the car y
rying amount of an asset m y
ay not be recoverablbl
a e, as
prescribib d
ed by
by ASC T
i
opic 360, "Accounting for
f
hthe Imp iairment or Dispos lal of Lo g
ng- i
Lived Assets".
Bank Premises and Equipm
i
ent Hel
H d F
l
or
F
Sale
q p
- Bank premises and equipment designated as held for
f
sale are included in
Other Assets on the Balance Sheet, and are carried at the lower of cost or market value, and totaled $702 thousand and
$974 thousand at December 31, 2024 and 2023, respectively. The $272 thousand decrease in balance at December 31, 2024
related to the sale of the Riverview Halifax
f
building in 2024. As of December 31, 2024, one property remained for
f
sale.
Foreclosed Assets Held for Sal
S e
f
- Real estate properties acquired through, or in lieu of, loan foreclosure are initially
recorded at their fai
f r value less estimated disposition costs. When such assets are acquired, any shortfal
f l between the loan
carrying value and the estimated fai
f r value of the underlying collateral less disposition costs is recorded as an adju
d stment to
the allowance for
f
loan losses while any excess is recognized in income. The Corpor
r
ation periodically performs a valuation
of the property held; any excess of carrying value over fai
f r value less disposition costs is charged to earnings as
impairment. Routine maintenance and real estate taxes are expensed as incurred.
Bank-O
k
wned Life
i
Insurance ("BOLI")"
f
(
) - Mid Penn is the owner and beneficiary o
r
f BOLI policies on current and for
f
mer Mid
Penn directors, as well as BOLI policies acquired through the Phoenix, First Priority, Riverview and Brunswick
acquisitions covering certain former Miners Bank, First Priority, Riverview, and Bruns
r
wick employees. These policies are
recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash
surrender value adju
d sted for other charges or other amounts due
d
that are probabl
a e at settlement, if appl
a
icable. Increases in
the cash surrender value of these policies are included in noninterest income in the Consolidated Statements of Income.
The Corpor
r
ation's BOLI policies are invested in general account and hybrid account products that have been underwritten
by highly-rated third party insurance carriers.
Mid Penn is also party to certain Split-Dollar Life I
f
nsurance Arrangements, and in accordance with GAAP, has accrue
r
d a
liabi
a lity related to the postretirement benefits
f
covered by an endorsement split-dollar life i
f
nsurance arrangement, and a
liabi
a lity for the future death benefit.
f
Goodwill and Othe
t
r Int
I angible Assets
g
- Go d
odwilill represents the excess of the pur h
chase p irice over the
d
unde lrlyiyi g
ng fair value
of me g
rg d
ed en iti ities. We assess goodw
goodwill
ill fo i
r imp iairment annualllly as of Oct b
ober 31 of e
h
ach year. The Corporatio
h
n has one
repor iting u init, comm
i
uni yty ba ki
nki g
ng,
h
which i
h includes the Ba k
nk, hthe Corpor
r
ation’s wh l
hollyly-own d
ed ba ki
nki g
ng subs
u
ididia y
ry. If
certain events occur whihi h
ch indidicat g
e g
d
oodwill
ill
i
might
ght be impair d
ed between annual tests g
, g
d
oodwill
ill must be test d
ed
h
when su h
ch
events occur. In makiki g
ng hthis assessment, we use the
i
widelyly accepted v lalua ition t
h
ech iniques, in lcl di
udi g
ng hthe p bl
ublic company
ma k
rket h
change of control appr
a
oa h
ch and the peer group c
u
ha g
nge of control appr
a
oa h
ch, t
d
o deter i
mine the fair valuation of the
repor iting u init. Bo hth approa h
ches in lcl d
ude earnings and p irice-to-tangi
ngiblbl
b
e b
k
ook value m lul itiples of comparablbl
a e p bl
ublic
companies,
h
which are ap lplied to the ear ini g
ngs and e
i
qui yty of hthe repor iting u init.
h
The projeje
o ct d
ed tangi
ngiblbl b
e b
k
ook valu (
e ("TBV )")
mul i
lti lple serves as a i
n i di
ndicator of
h
whether the ma k
rket price or per
i
ceived v lalue of hthe Compa y
ny's tangigiblble assets ex
d
ceed i
s its
book
book value.
In 2024,
hthe compa y
ny ap lplied a control premium based on its review of observabl
a e transactions and
comparable marketpl
t ace data. Several factors are considered, such as operating results, business plans, economic
projections, anticipated future cash flows, current market data, etc. There are inherent uncertainties related to these fac
f
tors
and our judgment in appl
a
ying them to the analysis of goodwill impairment. Changes in economic and operating conditions
could result in goodwill impairment in future periods. The Bank did not identify a
f
ny impairment on its outstanding
goodwill from its most recent testing, which was performed as of October 31, 2024.
Core deposit intangible ("CDI") is a measure of the value of checking and savings deposits acquired in business
combinations. The fair value of the CDI stemming fro
f
m any given business combination is based on the present value of
the expected cost savings attributable to the core deposit funding relative to an alternative source of funding. CDI is
amortized over the estimated useful lives of the existing deposit relationships acquired, but does not exceed ten years.
Significantly all CDI is amortized using the sum of the years digits method.
Customer list intangibles are a measure of the inherent value of certain customer arrangements acquired in business
combinations. The fair value of the customer list is based on the income appr
a
oach which employs a present value analysis,
MID PENN BANCORP, INC.
80

which calculates the expected after-tax cash flo
f w benefit
f s of the net revenues generated by the acquired customers over the
expected life o
f
f the acquired customers, discounted at a long-term market-oriented after-tax rate of return on investment.
The value assigned to the acquired customers represents the fut
f ur
t
e economic benefit fro
f
m acquiring the customers (net of
operating expenses). The customer list is amortized over a 10 to 20-year projection period, a suffi
f cient time to capture the
economic value of the customer list given an assumed customer attrition rate.
The Corpor
r
ation evaluates such identifia
f bl
a e intangibles for impairment when events and circumstances indicate that its
carrying amount may not be recoverabl
a e. If an impairment loss is determined to exist, the loss is refle
f cted as an impairment
charge in the Consolidated Statements of Income for the period in which such impairment is identifie
f d. No impairment
charges were required for
f
the years ended December 31, 2024, 2023, or 2022.
Leases - Mid Penn leases certain premises and equipment and recognizes a right-of-use ("ROU") asset and a related lease
liabi
a lity for each distinct lease agreement. The lease ROU asset consists of the amount of the initial measurement of the
lease liabi
a lity, adjusted for
f
any lease payments made to the lessor at or befor
f
e the commencement date, minus any lease
incentives received, and any initial direct costs incurred by the lessee (defined as costs of a lease that would not have been
incurred had the lease not been executed). The related lease liabi
a lity is equal to the present value of the fut
f ur
t
e lease
payments, discounted using the rate implicit in the lease (or if that rate cannot be readily determined, the lessee’s
incremental borrowing rate). Given that the rate implicit in the lease is rarely availabl
a e, all lease liabi
a lity amounts are
calculated using Mid Penn’s incremental borrowing rate at lease inception, on a collateralized basis, for a similar term. For
operating leases existing prior to January 1, 2019, the rate for
f
the remaining lease term as of January 1, 2019 was used.
Operating and finance lease ROU assets, as well as operating lease liabi
a lities, are presented as separate line items on the
Consolidated Balance Sheet, while finance lease liabi
a lities are classified as a component of long-term debt.
Operating lease expense, recognized as a component of occupa
u
ncy expense on the Consolidated Statements of Income,
consists of a single lease cost calculated so that the remaining cost of the lease is allocated over the remaining lease term on
a straight-line basis. Operating lease expense also includes variabl
a e lease payments not included in the lease liabi
a lity, and
any impairment of the ROU asset. Finance lease expense consists of the amortization of the ROU asset, recognized as a
component of occupa
u
ncy expense and interest expense on the lease liabi
a lity, which is recorded as a component of other
interest expense, both on the Consolidated Statements of Income.
In assessing whether a contract contains a lease, Mid Penn reviews third-party agreements to determine if the contract
conveys the right to control the use of identifie
f d property, plant, or equipment for
f
a period of time in exchange for
consideration, and grants Mid Penn the right to both obtain substantially all of the economic benefits from the identifie
f d
asset’s use and the direct the use of the identifie
f d asset throughout the term of the agreement.
Upon identific
f ation that a lease agreement exists, Mid Penn performs an assessment of the consideration to be paid related
to the identifie
f d asset and quantifie
f s both the lease components, consisting of consideration paid to transfer a good or
service to Mid Penn and non-lease components, consisting of consideration paid for
f
distinct elements of the contract that
are not related to securing the use of the leased asset, such as property taxes, common area maintenance, utilities, and
insurance.
Many of Mid Penn’s lease agreements include options to extend or renew contracts subsequent to the expiration of the
initial lease term. Additionally, for leases that contain escalation clauses related to consumer or other price indices, Mid
Penn includes the known lease payment amount as of the commencement date in the calculation of ROU assets and related
lease liabi
a lities. Subs
u
equent increases in rental payments over the known amount at the commencement date due
d
to increase
in the indices will be expensed as incurred.
None of Mid Penn’s lease agreements include residual value guarantees or material variable lease payments. Mid Penn
does not have material restrictions or covenants imposed by leases that would impact Mid Penn’s abi
a lity to pay dividends
or cause Mid Penn to incur additional fin
f ancial obligations.
Comprehensive Inc
I
ome
p
- Comprehensive income consists of net income and other comprehensive income (loss). Other
comprehensive income (loss) includes changes in unrealized gains and losses on securities availabl
a e for
f
sale arising dur
d
ing
the period and reclassification adju
d stments for
f
realized gains and losses on securities availabl
a e for
f
sale included in net
income. Mid Penn has an unfunde
f
d noncontributory d
r
efin
f ed benefit plan for
f
directors and other postretirement benefit
f
plans covering full-time employees. These plans utilize assumptions and methods to calculate the fai
f r value of plan assets
MID PENN BANCORP, INC.
81

and recognizing the overfunded and underfunded status of the plans on its Consolidated Balance Sheet. Gains and losses,
prior service costs and credits are recognized in other comprehensive income (loss), net of tax, until they are amortized, or
immediately upon
u
curtailment.
Trust Assets and Income - Assets held by the Bank in a fiduciary or agency capa
a
city for customers of the trust department
of the Bank are not included in the Consolidated Financial Statements since such items are not assets of the Bank. Assets
under management totaled $473.5 million as of December 31, 2024, Most trus
r
t income is recognized as earned, which is
not materially different than if it were reported on the accrua
r
l basis.
Revenue Recognition
g
- Mid Penn recognizes revenue when earned based upon
u
contractua
t
l terms, as transactions occur, or
as related services are provided, and collectability is reasonabl
a y assured. The largest source of revenue for Mid Penn is
interest income. Noninterest income is earned fro
f
m various banking and financial services that Mid Penn offers through its
subs
u
idiaries. In certain circumstances, noninterest income is reported net of associated expenses. Following is further detail
on the various types of noninterest income Mid Penn earns and when it recognized:
Interest Income - primarily recognized on an accrua
r
l basis according to loan agreements, investment securities
contracts or other such written contracts.
Income from Fiduc
d
iary and Wealth Management Activities
y
g
- consists of trus
r
t, wealth management, and investment
management fee income, brokerage transaction fee
f
income, and estate fee income. Trus
r
t, wealth management, and
investment management fee income consists of advisory fees that are typically based on market values of clients’
managed portfol
f ios and transaction fees
f
for fid
f uc
d
iary services performed, both of which are recognized as earned.
Brokerage transaction fee
f
income includes advisory fees, which are recognized as earned on a monthly basis and
transaction fee
f
s that are recognized when transactions occur. Payment is typically received in the following
month. Estate fee income is recognized as services are performed over the service period, generally eighteen
months.
ATM Debit Card Interchange Income
g
- consists of interchange fees earned when Mid Penn’s debit cards are
processed through card payments networks. The interchange fee is calculated as a percentage of the total
electronic funds
f
transfer
f
("EFT") transaction plus a per-transaction fee,
f
which varies based on the type of card
used, the method used to process the EFT transaction, and the type of business at which the transaction was
processed. Revenue is recognized daily as transactions occur and interchange fees are subsequently processed.
Payment for
f
interchange activity is received primarily daily, while some fees are aggregated and payment is
received in the following month.
Service Charges on Deposits
g
p
- consist of cash management, overdraft, non-sufficient fund
f
fees and other service
charges on deposit accounts. Revenue is primarily transactional and recognized when earned, which is at the time
the respective initiating transaction occurs, and the related service charge is subs
u
equently processed. Payment for
f
service charges on deposit accounts is primarily received immediately or in the fol
f lowing month through a direct
charge to the customers’ accounts.
Mortgage Banking Income
g g
g
- consists of gains or losses on the sale of residential mortgage loans and is recognized
when the sale is completed.
Mortgage Hedging Income
g g
g g
- relates to the changes in fai
f r value of interest rate locks, forward mortgage loan sales
commitments and hedging instruments on for
f
ward sales commitments.
Other Income - includes credit card royalties, check orders, letter of credit fees
f
and merchant services income.
These fees
f
are primarily transactional, and revenue is recognized when transactions occur, and the related services
are subsequently processed. Payment is primarily received immediately or in the following month.
Mid Penn does not exercise significant judgements in the recognition of income, as typically income is not recognized until
the performance obligation has been satisfied.
MID PENN BANCORP, INC.
82

Income Taxes
a
- Income tax expens i
e i d
s deter i
min d
ed using the asset a d
nd liliabibi
a lility meth d
hod and consists of income taxes that are
currentlyly payablbl
a e a d
nd deferred i
d income taxes. Defer
f red i
d income tax expens (
e (benefifi )t) is determin d
ed by
by recogni
gni izi g
ng deferred
tax assets and l
d liabibi
a lili ities for fut
f ur
t
e tax consequences attribibut b
able to temporary d
y d
r
ififfe
f rences between hthe fin
f an ici lal statement
car y
rying amounts of e ixisting assets a d
nd liliabibi
a lilities a d
nd hth ieir respective tax bases. Deferred tax assets and l
d liabibi
a lili ities are
measur d
ed using enact d
ed tax rates hthat are expect d
ed to ap lply to tax b
able income in year
i
s in whihi h
ch hthose temporary
r
didifferences are expect d
ed to be recovered or set ltled.
h
Change i
s in tax rates o d
n defer
f red tax assets and l
d liabibi
a li i
lities are recogni
gnized
in income in hthe period tha i
t includes the enactment date.
A v lalua ition allllowance is establbl
a ished f
d for
f
deferr d
ed tax assets
h
when management determines hthat it is more lilikelyly hthan not
hthat some por ition or
lall of a deferred tax asset wilill not be re laliz d
ed. In m k
aking such d
h deter i
minations, the Corporation
consididers allll av iailablbl
a e positive a d
nd nega itive e ividence that m y
ay impact hthe r
l
ealization of d
f defer
f red tax assets. These
consididerations in lcl d
ude future revers lals of e ixisting tax b
able temporary d
y d
r
ififfe
f rences, projeje
o ct d
ed future taxablbl
a
i
e income, and
av iailablbl
a e tax lplan ini g
ng strategigies.
h
The Corpor
r
ation filil
f es a cons lolididat d
ed federal i
l income tax return in lcl di
udi g
ng hthe res lults of its
h
wh lollyly-own d
ed subs
u
ididia iries. The
Corporation estimates income taxes p y
ay b
able based on the amount it expects to owe hthe various tax authori i
itie (
s (i.e., f d
ed
f
er lal
and state). Income taxes represent hthe net es itimat d
ed amount due to, or t
b
o be r
i
eceived f
d fro
f
m, su h
ch tax authori i
ities. In
es itima iting i
g income taxes, man g
agement assesses the rela itive me irits and risks of hthe appr
a
opriate tax treatment of transactions,
takiki g
ng into account statut
t ory,
r
jujudidi ici lal, a d
nd regul
gulatory g
y g
r
iuidanc i
e in the context of the Corporation’s tax posi i
ition.
l
Al hthough
ough
hthe Corpo
r
ra ition uses the best av iailablbl
a
i
e infor
f
ma ition to reco d
rd income taxes,
d
unde lrlyiyi g
ng es itimates a d
nd assump itions can
h
change over time as a res lult of unanticipat d
ed events or icircumstances su h
ch as h
change i
s in tax laws and j
d j di
udi ici lal gui
guidance
inflfluencing i
g its overallll tax position.
An uncertain tax positio
i
n is recogni
ogni
d
zed
l
only i
y if i
f i i
t is more-lik
lik lely- hthan-not to be sust iained upon
u
examination, in lcl di
udi g
ng
resolu ition of a y
ny related appe
a
lals o l
r litig
itigation process, based on the te h
ch ini
l
cal me irits of hthe posi i
ition.
h
The amount of tax
be
benefifit recogni
gnized i
d in the fifinancial statement i
s is the la g
rgest amount of benefifit tha i
t is more than fifif
f
yty
f
percen l
t likik lely t
b
o be
sust iained upon
u
lul itimate se l
ttlement of the uncertain tax posi i
ition. If hth i
e i ini itial assessment f iai
f ls to result in recogni
gni ition of a
ta b
x benefit,
f
hthe Corpor
r
ation s b
ubsequentlyly recogni
gnizes a tax benefifi i
t if there are cha g
nge i
s in tax law or cas l
e law hthat raise the
lik
lik lelihih
d
ood of prev iailili g
ng on hthe t
h
ech ini
l
cal me irits of hthe position to more-lik
lik lely- hthan-not, the statut
t e of l
f li i
imita itions ex ipires, or
hther i
e is a comple ition of an exa i
mination res lul iti g
ng in a set ltlement of that tax year or posi i
ition wi h
ith hthe appr
a
opriate g
agen y
cy.
h
The Corpor
r
ation’s p lolicy i
y is to cla i
ssi y
fy interest and pen lal ities associated wi h
ith income taxes wi h
ithin other expenses.
h
The Corpor
r
atio
i
n is subj
ubject to routine a di
udits by
by ta ixi g
ng juju iri d
sdic itions h
; however, there are currentlyly no audidits in pr g
ogress for
f
any tax pe iri d
ods. Man g
agemen b
t b lelieve i
s i i
t is n l
o l
g
onger subj
ubject t i
o income tax examinations fo y
r years p irior to 2021.
Off-
f Balance She
S
et Arrangementst
fff
g
-
h
The Corpor
r
ation enter i
s into contractua
t
l l
l loan com i
mitments to extend credidit, normalllly
i
wi hth fifixed expiratio
d
n dates or termination clauses, at spe icififi d
ed rates a d
nd for spe icifific purpos
r
es. Since a por ition of the
co
i
mmitments are expect d
ed to ex ipire
i
wi hthout being d
g drawn upon, hthe tot lal co
i
mmitment amount d
s do not necessa irilyly represent
future cash req iuirements. Subs
u
tantially
lly lall of the commitments to extend credidit are contingent upon customers m iaint iai ini g
ng
sp
i
ecifific credidit sta d
nda d
rds untilil hthe time of loan fu di
ndi g
ng.
h
The Corpor
r
atio
d
n decreases its exposure t
l
o loss u d
nder these
co
i
mmitment b
s by subj
ubjec iti g
ng hthem to cr d
edit approval a d
nd mo inito iri g
ng proc d
edur
d
es.
Standby
dby letters of cr d
edit are w iritten c
di
ondi itional com i
mitment i
s issu d
ed by
by hthe Corpor
r
ation t g
o guarantee hthe performance of a
customer to a thihi d
rd party. In hthe event hthe custome d
r does not perform in acco d
rdance
i
wi hth hthe terms of hthe agreement
i
wi hth
hthe thihi d
rd party, hthe Corpor
r
ation w
l
ould b
d be req iuired to f
d
und
f
hthe com i
mitment. The ma iximum poten itial amount of futur
t
e
payments hthe Corpor
r
ation c
l
ould b
d be req iuired to m k
ak i
e is represent d
ed by
by hthe contractua
t
l amount of hthe com i
mitment. If the
co
i
mmitment is fu d
nded, hthe Corpor
r
ation w
l
ould b
d be enti l
itl d
ed to se k
ek recove y
ry from the customer. The Corporation’s p lolicies
generally
lly require that standby
ndby letter of credidit arrangements cont iain secu iri yty and d
d d b
ebt covenants si il
imilar to those cont iained
in loan g
agreements.
Earnings per Com
C
mon Shar
S
e
g p
-
h
The Corpor
r
ation present b
s basic and d
d dililut d
ed earnings per common share ("EPS") d
) data for
f
its
common sto k
ck. Basic EP
i
S is c lalculated b
d by d
y divididing the ne i
t income attribibut b
able to h
shar h
eh lolders of hthe Corpor
r
atio
b
n by the
weigight d
ed aver g
age number of shares of common sto k
ck outstandidi g
ng during the pe iri d
od.
i
Diluted EPS is determin d
ed by
by
MID PENN BANCORP, INC.
83

d
adjuju
d sting the profit
f
or loss attribibut b
able to
h
shar h
eh lolders and the weigight d
ed aver g
age number of shares of common sto k
ck
outstandidi g
ng d
adjuju
d st d
ed for the effe
f cts of allll didilu itive poten itial common shares compris d
ed of rest irict d
ed stock awa d
rds.
Treasury Stock
y
- Common stock h
k h leld i
d in treasury i
y i
r
s account d
ed for u isi g
ng hthe cost meth d
hod,
h
which treats sto k
ck heldld in treasu y
ry
as a r d
educ
d
ition to tot lal stockh l
kholders’ e
i
qui yty. The h
shares may b
y be pur h
chas d
ed in hthe open market o i
r in p irivatelyly negotiated
transactions from time to time depe di
ndi g
ng upon hthe market c
di
ondi itions and o hther factors over a one y
-year pe iri d
od or su h
ch
lo g
nger period of time as may b
y be necessa y
ry to complete su h
ch repur h
chases.
Derivative Fin
F ancial Ins
I
truments
Loan l-lev lel Interest Rate Swaps
p
h
The Corpor
r
ation offers cert iai
d
n derivative products didirectlyly to qualif
lifie
f d commercial l
l lendidi g
ng
lclients seekiki g
ng to
manage hth iei i
r interest rate risk.
h
The Corpor
r
ation economic lallyly hedge
dge i
s interest rate swap t
a
ransactions to execute
i
wi hth commer ici lal le di
ndi g
ng
lclient
b
s by entering i
g into offset iting i
g interest rate swap t
a
ransactions
i
wi hth institu itional
de iriva itives ma k
rket participants. Derivative transac itions execut d
ed as part of hthis pr g
ogram are not de isigned as
qualif
lifyiyi
f
g
ng hedgi
dgi g
ng rela itionshihips and are, therefore, car iri d
ed at fair value wi h
ith hthe cha g
nge in fair value recorded as
i
noninteres i
t income. Because hthes
d
e derivatives have
i
mirro i
r-image contractua
t
l terms i
, in addi
ddi itional to c lollateral
pr
i
ovi isions
h
which mitigigate the impact of non-performance
iri k
sk, the
h
change
i
s in f iai
f r v lalue are expect d
ed to
subs
u
tantially
lly offs
f et.
Cash Flow Hedges of Interest Rate Risk
g
Mid Penn’s objectives in using interest rate derivatives are to reduc
d
e 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. Beginning in the fir
f st quarter of 2023, Mid Penn
entered into interest rate swaps
a
designated as cash flo
f w hedges to hedge the cash flo
f ws associated with existing
brokered CDs.
For derivatives designated and that qualify a
f
s cash flo
f w hedges of interest rate risk, the unrealized gain or loss on
the derivative is recorded in AOCI and subs
u
equently reclassified into interest income in the same period dur
d
ing
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 variabl
a e-rate liabi
a lities.
Mortgage Ba ki
nki g
ng De iriva itive Finan ici lal Instruments
g g
g
In connection with its mortgage banking activities, Mid Penn entered into commitments to originate certain fix
f ed-
rate residential mortgage loans for customers, also refer
f red to as interest rate locks. In addition, Mid Penn entered
into forward commitments for
f
the fut
f ur
t
e sales or purchases of mortgage-backed securities to or fro
f
m third-party
counterpa
r
rties to hedge the effect of changes in interest rates on the values of both the interest rate locks and
mortgage loans held for
f
sale. Forward sales commitments may have also be in the for
f
m of commitments to sell
individual mortgage loans at a fix
f ed price at a future date. The amount necessary to settle each interest rate lock
was based on the price that secondary market investors would pay for loans with similar characteristics, including
interest rate and term, as of the date fai
f r value is measured.
Recent Accounting Pronouncements
g
Ac
Accountin
t
g S
g Sta
S
d
ndar
d
ds Ad
Adopt
d
ed
ed
t
On January 1, 2023, the Corpor
r
ation adopted ASC 326, Financial Ins
I
truments - Cre
C
dit Losses, which replaces the incurred
loss methodology, and is refer
f red to as CECL. The measurement of expected credit losses under CECL appl
a
ies to fin
f ancial
assets measured at amortized cost, including loans and HTM debt securities. It also applies to OBS credit exposures (loan
commitments, standby letters of credit, financial guarantees, and other similar instrum
r
ents) and net investments in leases
recognized by a lessor in accordance with ASC Topic 842.
The Corpor
r
ation adopted CECL using the modified retrospective method for all financial assets measured at amortized
cost, net of investments in leases and OBS credit exposures. Results for reporting periods beginning afte
f r January 1, 2023
are presented under CECL, while prior period results are reported in accordance with the previously applicable incurred
MID PENN BANCORP, INC.
84

loss methodology. The Corpor
r
ation recorded an overall increase of $15.0 million to the ACL on January 1, 2023 as a result
of the adoption of CECL. Retained earnings decreased $11.5 million and defer
f red tax assets increased by $3.1 million.
Included in the $15.0 million increase to the ACL was $3.1 million for
f
certain OBS credit exposures that were previously
recognized in other liabi
a lities befor
f
e the adoption of CECL.
On January 1, 2023, the Corpor
r
ation adopted ASU 2022-02, Financial Ins
I
truments - Cre
C
dit Losses (To
(
pi
o c 326): Tro
T
ubled
Debt Restru
t
cturings and Vintage Disc
i
losures, which eliminates the accounting guidance for
f
troubled debt restructur
t
ings in
Accounting Standards Codification ("ASC") Subt
u opic 310-40, Receivabl
a es - Troubled Debt Restructur
t
ings by Creditors,
while enhancing disclosure requirements for
f
certain loan refinancings and restruc
r
turings by creditors when a borrower is
experiencing financial diffi
f culty. Additionally, ASU 2022-02 requires entities to disclose current-period gross write-offs by
year of origination for
f
financing receivabl
a es and net investments in leases within the scope of ASC Subtopic 326-20,
Financial Instrum
r
ents - Credit Losses - Measured at Amortized Cost. See "Note 4 - Loans and Allowance for
f
Credit Losses
- Loans" for
f
the new financial statement disclosures appl
a
icable under this upda
u
te.
The upda
u
tes to the significant accounting policies related to CECL are fur
f
ther discussed in "Note 3 - Investment
Securities", "Note 4 - Loans and Allowance for
f
Credit Losses - Loans" and "Note 18 - Commitments and Contingencies".
ASU No. 2023-02: The FASB issued ASU 2023-02, Investme
t
nts -
t
Equity Method and Joint Ven
V
tures (To
(
pi
o c 323):
Accounting for
f
Investme
t
nts i
t
n Tax
T
Credit Stru
t
ctures Using the
t
Proportional Amortization Met
M hod.
t
The amendments in this update permit reporting entities to elect to account for their tax equity investments, regardless of
the tax credit program from which the income tax credits are received, using the proportional amortization method if
certain conditions are met. A reporting entity may make an accounting policy election to appl
a
y the proportional
amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to appl
a
y the proportional
amortization method at the reporting entity level or to individual investments. The amendments in this update also remove
certain guidance for
f
Qualifie
f d Affor
f
dabl
a e Housing Proje
o ct investments and require the appl
a
ication of the delayed equity
contribution guidance to all tax equity investments. The amendments in this update are effective for
f
fiscal years beginning
afte
f r December 15, 2023, and must be appl
a
ied on either a modified retrospective or a retrospective basis.
ASU 2023-07:
h
The FAS
i
B issu d
ed ASU 2023-07, Segm
e
ent Reporting (
g (To
(
pi
o c 2
)
80): Imp
I
rovements to Repor
e
tablble S g
eg
S
me
g
nt
Disc
i
losures.
ASU 2023-07 amends hthe ASC to improve reportablbl
a e s g
egment didisclosure re
i
quirements, prima irilyly hthrough
ugh enhanc d
ed
didisclosures abo
a
ut isigni
gnifificant s g
egment expenses. The amendments in hthis
d
update are effective for
f
fifisc lal year b
s b g
egin ini g
ng
afte
f r December 15, 2023, and i
d interim pe iri d
ods
i
wi hthin fifisc lal year b
s b g
egin ini g
ng afte
f r December 15, 2024.
Ac
Accountin
t
g S
g Sta
S
d
ndar
d
ds Pe d
ndin
d
g A
g Adoptio
t n
ASU 2023-06:
h
The FAS
i
B issu d
ed ASU 2023-06, Disc
i
losure Impr
m
ovements - C d
odi
C
fic
fic
i
ation Ame d
ndments in Response to the
t
SEC’s D
’
is lclosure U d
pdat
U
e a d
nd Simplific
lification Ini
I tiative.
ASU 2023-06 amends
hthe ASC to incorporate certain didisclosure re
i
quirements fro
f
m SEC Release No. 33-10532 -
i
Disclosure Update and Sim lplifific
f ation that was issu d
ed in 2018.
h
The effectiv d
e date for
f
h
each amendment will
ill be hth d
e date on
h
which the SEC’s removal of that r lelat d
ed didisclosure from Regul
gulation S-X or Regul
gulation S-K becomes effective,
i
wi hth ea lrly
d
adoption prohihibibited. ASU 2023-06 is not expect d
ed to have a sigig inififican i
t impact on our fifinancial statements.
ASU 2023-09: The FASB issu d
ed ASU 2023-09, Income Taxe
a
(
s (To
(
pi
o c 7
)
40): Imp
I
rovements to Income Tax D
a
is lclosures.
ASU 2023-09 amends hthe ASC to enhanc i
e income tax didisclosure b
s by req iui iri g
ng en i i
tities t
d
o dis lclos i
e income taxes paidid (net
of refu d
nds receiv d
ed) d
) dis g
aggr g
egat d
ed by
by federal, state a d
nd foreigign taxes. Addi
ddi itionally
lly, enti i
ities are re
i
quired t
d
o dis lclose
amount g
s greater hthan 5% of hthe tot lal income taxes p iaid to a
i
n i di
ndi ividual j
l jurisdidiction The amendments are effective for
f
annual periods begigi
i
nni g
ng afte
f r December 15, 2024. ASU 2023-09 is not expect d
ed to have a sigig inififican i
t impact on hthe
Corporation's fin
f an ici lal statements.
ASU 2024-01—The FASB issued ASU 2024-01, Compensation - Stock Com
C
pe
m
nsation (To
(
pi
o c 718): Sco
S
pe
o
application ofo
profits
f
interest and similar awards.
d
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
f
annual periods beginning
MID PENN BANCORP, INC.
85

afte
f r December 15, 2025, and interim periods within those annual periods. ASU 2024-01 is not expect d
ed to have a
isigni
gnififican i
t impact on hthe Corpor
r
ation's fin
f an ici lal statements.
ASU 2024-02: The FASB issued ASU 2024-02, Codifi
i cation Impr
m
ovements—Amendments to Remove Refe
e rences to the
Concepts Statements.
h
This ASU cont iains amendments to hthe C di
odifification that remove references to va irious FASB Concepts Statements. The
amendments are effective for
f
fifisc lal year b
s b g
egin ini g
ng afte
f r December 15, 2025. Ea lrly adoptio i
n is per i
mitted. ASU 2024-02 is
not expect d
ed to have a sigig inifificant impact on hthe Corpor
r
ation's fin
f an ici lal statements.
ASU 2024-03: The FASB issu d
ed ASU 2024-03, Income Statement—Re
—
por
e
ti g
ng Comprehensive Inc
I
ome—Ex
—
pe
x
nse
Disa
i
gg
ggr g
egation Dis lclosures (S b
ubt
S
opic 220-
)
40): Dis gg
aggr g
egation of I
f I
o
nc
I
ome Sta
S tement Expe
x
nses
h
The ame d
ndments in hthe ASU improve fifinancial repor iting b
g by req iui iri g
ng hthat
bl
public business enti i
itie
d
s dis lclose addi
ddi itional
information about
a
specifific
f
expense cat g
egorie i
s in the notes to fifinancial statements a i
t interim and annual repor iting periods.
h
The ame d
ndments are effective for
f
annual repor iti g
ng pe iri d
ods begigi
i
nni g
ng afte
f r December 15, 2026, and i
d interim repor iting
pe iri d
ods begigi
i
nni g
ng afte
f r December 15, 2027. Ea lrly adoptio i
n is per i
mitted. ASU 2024-03 is not expect d
ed to have a sigig inifificant
impact on hthe Corpor
r
ation's fin
f an ici lal statements.
ASU 2024-04:
h
The FAS
i
B issu d
ed ASU - 2024-04, Debt—D
t
b
ebt with C
t
onv
C
ersi
r on
d
and Othe
t
r Opt
O ions (S b
ubt
S
opic 470-
)
20):
Induc d
ed Conversi
r ons ofof Conver b
tible Debt Instru
t
mentst
h
The ame d
ndments in hthe ASU
lclarifify t
f
he re
i
quirements for
f
determining whe hther certain se l
ttlements of convertibible debt
instruments sh
l
hould b
d be account d
ed for as a i
n i d
nduc d
ed conversion.
h
The ame d
ndments in hthe ASU are effective for
f
lall enti i
ities for
annual repor iting periods begiginning after December 15, 2025, and i
d interim repor iting periods
i
wi hthin hthose annual repor iting
pe iri d
ods. Earlyly d
adoptio i
n is per i
mitted f
d for
f
lall entities tha h
t have adopt d
ed hthe ame d
ndments in ASU2020-06. ASU 2024-04 is not
expect d
ed to have a sigig inififican i
t impact on hthe Corpor
r
ation's fin
f an ici lal statements.
MID PENN BANCORP, INC.
86

Note 2 -Business Combinations
Commonwealth Benefits Group Acquisition
p
q
On July 31, 2024, Mid Penn acquired the insurance business and related accounts of a full-service employee benefit
f s fir
f m
that serves mid to large employers across central and eastern Pennsylvania, northern Maryl
r and, and northern Virginia, for a
purchase price of $2.0 million at closing and an additional $800 thousand potentially payabl
a e 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 liabi
a lities assumed compared to the fair market value of identifia
f bl
a e assets acquired.
Mid Penn incurred expenses related to the Commonwealth Benefits Group acquisition of $545 thousand for
f
the year ended
December 31, 2024, which is included in noninterest expense in the Consolidated Statements of Income.
Bruns
r
wick Acquisition
q
On May 19, 2023, Mid Penn completed its acquisition of Brun
r
swick through the merger of Brunswick with and into Mid
Penn with Mid Penn being the surviving corporation. In connection with this acquisition, Bruns
r
wick Bank, a wholly-owned
subs
u
idiary of Bruns
r
wick, merged with and into Mid Penn Bank, a wholly-owned subs
u
idiary of Mid Penn.
This transaction included the acquisition of 5 branches and extended Mid Penn’s foo
f
tprint into Middlesex and Monmouth
counties in central New Jersey. Mid Penn issued 849,510 shares of its common stock as well as a net cash payment to
Bruns
r
wick shareholders of $27.6 million, for total consideration of $45.7 million for all outstanding stock and the
cancellation of stock options of Bruns
r
wick.
Mid Penn has recognized total goodwill of $12.8 million, which is calculated as the excess of both the consideration
exchanged and liabilities assumed compared to the fair market value of identifia
f bl
a e assets acquired. The fai
f r value of the
consideration exchanged related to Mid Penn’s common stock was calculated based upon the closing market price of Mid
Penn’s common stock as of May 19, 2023. None of the goodwill recognized is expected to be deductible for
f
income tax
purpos
r
es.
Purchased loans and leases that refle
f ct a more-than-insignificant deterioration of credit fro
f
m origination are considered
PCD. Mid Penn considers various factors in connection with the identific
f ation 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 Bruns
r
wick Acquisition, Mid Penn acquired PCD loans and leases of
$18.7 million. Mid Penn established an ACL at acquisition of $336 thousand with a corresponding gross-up to the
amortized cost of the PCD loans and leases. The non-credit discount on the PCD loans and leases was $2.4 million and the
Day 1 fai
f r value was $16.3 million. The initial provision expense for
f
non-PCD loans associated with the Brunswick
Acquisition was $2.0 million.
MID PENN BANCORP, INC.
87

Estimated fai
f r values of the assets acquired and liabi
a lities assumed in the Bruns
r
wick Acquisition as of the closing date are
as follows:
(In thousands)s
Assets acquired:
Cash and cash equivalents
$
21,029
Federal funds
f
sold
7,604
Investment securities
2,423
Loans
324,471
Goodwill
12,800
Core deposit intangible
999
Premises and equipment
4,568
Cash surrender value of life i
f
nsurance
3,361
Deferred income taxes
6,393
Accrue
r
d interest receivabl
a e
1,171
Other assets
5,884
Total assets acquired
390,703
Liabilities assumed:
Deposits:
Noninterest-bearing demand
60,888
Interest-bearing demand
11,767
Money Market
47,362
Savings
14,203
Time
147,163
Long-term debt
60,136
Accrue
r
d interest payable
1,911
Other liabi
a lities
1,613
Total liabi
a lities assumed
345,043
Consideration paid
$
45,660
Cash paid
$
27,565
Fair value of common stock issued
18,095
Management has completed its evaluation of fai
f r values of all assets and liabi
a lities shown in the tabl
a e above
a
and all
amounts are considered final.
MID PENN BANCORP, INC.
88

Note 3 - Investment Securities
AFS Securitie
i
s
At December 31, 2024, the fai
f r value of AFS securities totaled $260.5 million. At December 31, 2024, no securities were
identifie
f d that violated credit loss triggers; therefore, no DCF analysis was performed, and no credit loss was recognized on
any of the securities availabl
a e for
f
sale.
Accrue
r
d interest receivabl
a e is excluded fro
f
m the estimate of credit losses for
f
AFS securities. At December 31, 2024,
accrue
r
d interest receivabl
a e totaled $1.2 million for
f
AFS securities, and was reported in accrued interest receivable on the
accompanying Consolidated Balance Sheet.
HTM S
T
ec
S
uritie
t s
At December 31, 2024, Mid Penn’s HTM securities totaled $382.4 million. The Company primarily held highly rated HTM
securities, including taxabl
a e and tax-exempt securities issued mainly by the U.S government, state governments, and
political subdi
u
visions. As of December 31, 2024, the majo
a rity of Mid Penn's HTM securities were rated as A1/BBB by
Moody's and/o
d r Standard & Poor's ratings services. Credit ratings of HTM securities, which are a key factor in estimating
expected credit losses, are reviewed on a quarterly basis.
At December 31, 2024, there were no HTM securities that were past due
d
30 days or more as to principal or interest
payments. Additionally, Mid Penn had no HTM securities classified as nonaccrua
r
l at December 31, 2024. Therefor
f
e, no
allowance for
f
credit losses was recorded as of December 31, 2024.
Accrue
r
d interest receivabl
a e is excluded fro
f
m the estimate of credit losses for
f
HTM securities. At December 31, 2024,
accrue
r
d interest receivable totaled $1.8 million for
f
HTM securities and was reported in accrued interest receivable on the
accompanying Consolidated Balance Sheet.
The fol
f lowing tabl
a es set for
f
th the amortized cost and estimated fai
f r value of investment securities for
f
the periods presented:
December 31, 2024
(In thousands)s
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Available-for-sale
U.S. Treasury a
r
nd U.S. government agencies
$
22,247
$
—
$
740
$
21,507
Mortgage-backed U.S. government agencies
222,464
11
19,531
202,944
State and political subdi
u
vision obligations
4,309
—
713
3,596
Corporate debt securities
35,750
—
3,320
32,430
Total availabl
a e-for-sale debt securities
$
284,770
$
11
$
24,304
$
260,477
Held-to-maturity
U.S. Treasury a
r
nd U.S. government agencies
$
241,941
$
—
$
28,133
$
213,808
Mortgage-backed U.S. government agencies
37,593
—
5,508
32,085
State and political subdi
u
vision obligations
77,462
—
6,840
70,622
Corporate debt securities
25,451
—
1,318
24,133
Total held-to-matur
t
ity debt securities
382,447
—
41,799
340,648
Total
$
667,217
$
11
$
66,103
$
601,125
MID PENN BANCORP, INC.
89

December 31, 2023
(In t
I
hous
t
ands)s
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
Availabl
a e-for-sale
U.S. Treasury a
r
nd U.S. government agencies
$
36,637
$
—
$
988
$
35,649
Mortgage-backed U.S. government agencies
169,184
—
16,501
152,683
State and political subdi
u
vision obligations
4,332
—
686
3,646
Corporate debt securities
35,733
—
4,156
31,577
Total availabl
a e-for-sale debt securities
$
245,886
$
—
$
22,331
$
223,555
Held-to-maturity
U.S. Treasury a
r
nd U.S. government agencies
$
245,805
$
2
$
28,676
$
217,131
Mortgage-backed U.S. government agencies
43,818
—
5,523
38,295
State and political subdi
u
vision obligations
84,035
11
6,486
77,560
Corporate debt securities
25,470
—
935
24,535
Total held-to-matur
t
ity debt securities
399,128
13
41,620
357,521
Total
$
645,014
$
13
$
63,951
$
581,076
Estimated fai
f r values of debt securities are based on quoted market prices, where applicable. If quoted market prices are not
availabl
a e, fair values are based on quoted market prices of instruments of a similar type, credit quality and struc
r
ture,
adju
d sted for diffe
f rences between the quoted instruments and the instrum
r
ents being valued. See "Note 13 - Fair Value
Measurement," for additional infor
f
mation.
Investment securities having a fair value of $440.0 million at December 31, 2024, and $380.3 million at December 31,
2023, 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 $156.0
million as of December 31, 2024 and $153.5 million as of December 31, 2023.
MID PENN BANCORP, INC.
90

The fol
f lowing tabl
a es present gross unrealized losses and fair value of investments aggregated by investment category a
r
nd
length of time that individual securities have been in a continuous unrealized loss position at December 31, 2024 and 2023.
(Dollars in thousands)s
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
Availabl
a e-for-sale debt securities:
U.S. Treasury a
r
nd U.S. government agencies
—
$
—
$
—
12
$
21,507
$
740
12
$
21,507
$
740
Mortgage-backed U.S. government agencies
9
72,499
1,847
91
130,445
17,684
100
202,944
19,531
State and political subdi
u
vision obligations
—
—
—
8
3,596
713
8
3,596
713
Corporate debt securities
—
—
—
18
32,430
3,320
18
32,430
3,320
Total availabl
a e-for-sale debt securities
9
$
72,499
$
1,847
129
$ 187,978
$
22,457
138
$ 260,477
$
24,304
Held-to-maturity debt securities:
U.S. Treasury a
r
nd U.S. government agencies
—
$
—
$
—
143
$ 213,808
$
28,133
143
$ 213,808
$
28,133
Mortgage-backed U.S. government agencies
2
163
1
62
31,922
5,507
64
32,085
5,508
State and political subdi
u
vision obligations
8
3,176
30
169
67,446
6,810
177
70,622
6,840
Corporate debt securities
4
10,500
—
11
13,633
1,318
15
24,133
1,318
Total held-to-matur
t
ity debt securities
14
13,839
31
385
326,809
41,768
399
340,648
41,799
Total
23
$
86,338
$
1,878
514
$ 514,787
$
64,225
537
$ 601,125
$
66,103
(Dollars in thousands)s
Less Than 12 Months
12 Months or More
Total
December 31, 2023
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
Availabl
a e-for-sale securities:
U.S. Treasury a
r
nd U.S. government agencies
—
$
—
$
—
19
$
35,649
$
988
19
$
35,649
$
988
Mortgage-backed U.S. government agencies
1
4,015
26
92
148,668
16,475
93
152,683
16,501
State and political subdi
u
vision obligations
—
—
—
8
3,646
686
8
3,646
686
Corporate debt securities
1
410
90
17
31,167
4,066
18
31,577
4,156
Total availabl
a e-for-sale securities
2
$
4,425
$
116
136
$ 219,130
$
22,215
138
$ 223,555
$
22,331
Held-to-maturity securities:
U.S. Treasury a
r
nd U.S. government agencies
1
$
2,002
$
—
144
$ 215,129
$
28,676
145
$ 217,131
$
28,676
Mortgage-backed U.S. government agencies
—
—
—
64
38,295
5,523
64
38,295
5,523
State and political subdi
u
vision obligations
25
8,729
63
170
68,831
6,423
195
77,560
6,486
Corporate debt securities
1
936
57
14
23,599
878
15
24,535
935
Total held to matur
t
ity securities
27
11,667
120
392
345,854
41,500
419
357,521
41,620
Total
29
$
16,092
$
236
528
$ 564,984
$
63,715
557
$ 581,076
$
63,951
At December 31, 2024 and 2023, 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 December 31, 2024 and
December 31, 2023, 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 c
r
hanges in value related to market movements in interest yields at various periods similar to
the matur
t
ity dates of holdings in the investment portfol
f io, and not reflective of an erosion of credit quality.
There were no gross realized gains and losses on the sale of AFS securities as of December 31, 2024.
MID PENN BANCORP, INC.
91

The table below illustrates the contractua
t
l matur
t
ity of debt investment securities at amortized cost and estimated fai
f r value.
Actual maturities may differ fro
f
m contractua
t
l matur
t
ities because borrowers may have the right to call or prepay with or
without call or prepayment penalties.
(In thousands)s
Available-for-sale
Held-to-maturity
December 31, 2024
Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
Due in 1 year or less
$
10,503
$
10,466
$
19,563
$
19,420
Due after 1 year but within 5 years
22,397
21,414
140,217
130,043
Due after 5 years but within 10 years
28,562
25,006
169,190
145,879
Due after 10 years
844
647
15,884
13,221
62,306
57,533
344,854
308,563
Mortgage-backed securities
222,464
202,944
37,593
32,085
$
284,770
$
260,477
$
382,447
$
340,648
MID PENN BANCORP, INC.
92

Note 4 - Loans and Allowance for
f
Credit Losses - Loans
Loans, net of unearned income, are summarized as follows by portfol
f io segment:
thousands)s
December 31, 2024
December 31, 2023
Commercial real estate
CRE Nonowner Occupied
$
1,251,010
$
1,149,553
CRE Owner Occupi
u ed
624,007
629,904
Multifamily
412,900
309,059
Farmland
224,709
212,690
Total Commercial real estate
2,512,626
2,301,206
Commercial and industrial
705,392
675,079
Construc
r
tion
Residential Construc
r
tion
99,399
92,843
Other Construction
326,171
362,624
Total Construction
425,570
455,467
Residential mortgage
1-4 Family 1st Lien
313,592
339,142
1-4 Family Rental
336,636
341,937
HELOC and Junior Liens
140,392
132,795
Total Residential Mortgage
790,620
813,874
Consumer
8,862
7,166
Total loans
$
4,443,070
$
4,252,792
Total loans are stated at the amount of unpaid principal, adju
d sted for net deferred fees
f
and costs. Net deferred loan fees
f
were $3.8 million and $4.2 million as of December 31, 2024 and 2023, respectively.
Accrue
r
d interest receivabl
a e is not included in the amortized cost basis of Mid Penn's loans. At December 31, 2024, accrued
interest receivabl
a e for
f
loans totaled $22.9 million with no related ACL and was reported in other assets on the
accompanying Consolidated Balance Sheet.
The Bank has granted loans to certain of its executive offic
f ers, directors, and their related interests. The aggregate amount
of these loans was $13.8 million and $22.0 million at December 31, 2024 and 2023, respectively. During 2024,
$924 thousand of new loans, advances and loans to new related parties were extended and repayments totaled $3.0 million.
In addition, for the year ended December 31, 2024 there were $8.0 million of loans that were no longer extended to related
parties. None of these loans were past due, in non-accrua
r
l status, or restructur
t
ed at December 31, 2024.
Past Due and Nonaccrual Loans
The performance and credit quality of the loan portfol
f io is also monitored by analyzing the age of the loans receivabl
a e as
determined by the length of time a recorded payment is past due
d
. The classes of the loan portfol
f io summarized by the past
due status
t
as of December 31, 2024 and December 31, 2023, are summarized as follows:
MID PENN BANCORP, INC.
93

thousands)s
30-59
Days Past
60-89
Days Past
Greater
than 90
Total Past
C
Total
Loans
Receivable
> 90 Days
and
A
i g
D
Due
Due
Days
Due
Current
Loans
Accruin
31 2024
Commercial real estate
CRE Nonowner Occupi
u ed
$
1,281
$
1,515
$
11,658
$
14,454
$ 1,236,556
$ 1,251,010
$
—
CRE Owner Occupi
u ed
39
51
262
352
623,655
624,007
—
Multifam
f
ily
—
—
—
—
412,900
412,900
—
Farmland
184
—
—
184
224,525
224,709
—
Total Commercial real estate
1,504
1,566
11,920
14,990
2,497,636
2,512,626
—
Commercial and industrial
74
3
794
871
704,521
705,392
—
Construc
r
tion
Residential Construction
—
—
—
—
99,399
99,399
—
Other Construc
r
tion
—
—
—
—
326,171
326,171
—
Total Construc
r
tion
—
—
—
—
425,570
425,570
—
Residential mortgage
1-4 Family 1st Lien
2,853
220
516
3,589
310,003
313,592
—
1-4 Family Rental
374
7
137
518
336,118
336,636
—
HELOC and Junior Liens
724
209
2,157
3,090
137,302
140,392
—
Total Residential Mortgage
3,951
436
2,810
7,197
783,423
790,620
—
Consumer
20
—
—
20
8,842
8,862
—
Total
$
5,549
$
2,005
$
15,524
$
23,078
$4,419,992 $4,443,070 $
—
thousands)s
30-59
Days Past
Due
60-89
Days Past
Due
Greater
than 90
Days
Total Past
Due
Current
Total
Loans
Loans
Receivabl
a e
> 90 Days
and
Accrui
r ng
December 31, 2023
Commercial real estate
CRE Nonowner Occupi
u ed
$
3,339
$
682
$
2,115
$
6,136
$1,143,417
$1,149,553
$
—
CRE Owner Occupi
u ed
1,734
—
859
2,593
627,311
629,904
—
Multifam
f
ily
—
—
—
—
309,059
309,059
—
Farmland
—
—
—
—
212,690
212,690
—
Total Commercial real estate
5,073
682
2,974
8,729
2,292,477
2,301,206
—
Commercial and industrial
638
24
1,270
1,932
673,147
675,079
—
Construc
r
tion
Residential Construc
r
tion
—
270
303
573
92,270
92,843
—
Other Construction
—
—
2,256
2,256
360,368
362,624
—
Total Construction
—
270
2,559
2,829
452,638
455,467
—
Residential mortgage
1-4 Family 1st Lien
1,554
217
847
2,618
336,524
339,142
—
1-4 Family Rental
2,520
—
644
3,164
338,773
341,937
—
HELOC and Junior Liens
574
50
1,027
1,651
131,144
132,795
—
Total Residential Mortgage
4,648
267
2,518
7,433
806,441
813,874
—
Consumer
41
31
—
72
7,094
7,166
—
Total
$
10,400
$
1,274
$
9,321
$
20,995
$4,231,797 $4,252,792 $
—
MID PENN BANCORP, INC.
94

Loans are placed on nonaccrua
r
l status when management determines that the full repayment of principal and collection of
interest according to contractua
t
l terms is no longer likely, generally when the loan becomes 90 days or more past due
d
.
Nonaccrua
r
l loans by loan portfol
f io class, including loans acquired with credit deterioration, as of December 31, 2024 and
2023 are summarized as fol
f lows:
cember 31, 2024
December 31, 2023
(In t
I
hous
t
ands)s
With a
Related
Allowance
Without a
Related
Allowance
Total
With a
Related
Allowance
Without a
Related
Allowance
Total
Commercial real estate
CRE Nonowner Occupied
$
2,622
$
11,153
$
13,775
$
361
$
4,144
$
4,505
CRE Owner Occupi
u ed
—
546
546
—
1,909
1,909
Multifamily
—
154
154
93
80
173
Farmland
—
—
—
—
—
—
Total Commercial real estate
2,622
11,853
14,475
454
6,133
6,587
Commercial and industrial
758
3,894
4,652
1,222
64
1,286
Construc
r
tion
Residential Construc
r
tion
—
—
—
—
303
303
Other Construction
—
—
—
—
2,256
2,256
Total Construction
— —
—
—
—
2,559
2,559
Residential mortgage
1-4 Family 1st Lien
—
1,028
1,028
—
1,875
1,875
1-4 Family Rental
—
176
176
2
699
701
HELOC and Junior Liens
—
2,279
2,279
—
1,208
1,208
Total Residential Mortgage
— —
3,483
3,483
2
3,782
3,784
Consumer
—
—
—
—
—
—
Total loans
$
3,380
$
19,230
$
22,610
$
1,678
$
12,538
$
14,216
The amount of interest income recognized on nonaccrua
r
l loans was appr
a
oximately $128 thousand and $174 thousand
during the three months ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and
2023, the amount of interest income recognized on nonaccrual loans was approximately $584 thousand and $1.2 million,
respectively.
Credit Quality Indicators
Mid Penn categorizes loans into risk categories based on relevant information about
a
the abi
a lity of borrowers to service their
debt, such as current financial infor
f
mation, historical payment experience, credit documentation, public information and
current economic trends, among other fact
f
ors. On a minimum of a quarterly basis, Mid Penn analyzes loans individually to
classify the loans as to their credit risk. The fol
f lowing tabl
a e presents risk ratings by loan portfol
f io 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, subs
u
tantial debt capacity, and low
leverage with a very f
r
av
f
orable comparison to industry p
r
eers or better than average improving trends.
Good Acceptable Risk / Pass - This type of classification is a reasonabl
a e credit risk having fin
f ancial 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.
MID PENN BANCORP, INC.
95

Average Acceptabl
a e Risk / Pass - This type of classification has financial ratios and assets that are of above
a
average quality; however, the leverage is worse than average compared to industry s
r
tandards; 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
r
averages, assets of average quality with ascertainable values, acceptabl
a e leverage, moderate capital assets and an
acceptabl
a e reliance on trade debt; however, the Borrower demonstrates marginally adequate earnings, cash flo
f w
and debt service plus positive trends.
Weak/M
k
onitor Risk (Watch list) / Pass - This type of classification has financial ratios that are slightly below
standard industry a
r
verages and assets are below average quality with unstabl
a e values; fixed assets could be near or
at the end of their useful life a
f
nd liabilities may not match the asset struc
r
ture.
SPECIAL MENTION - These credits have developing weaknesses deserving extra attention fro
f
m the lender and lending
management. They are currently protected, but potentially weak. The weakness may be, cash flo
f w, leverage, liquidity,
management, industry o
r
r other factors which may, if not checked or corrected, weaken the asset or inadequately protect the
Bank’s credit position at some fut
f ur
t
e 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 fin
f ancial, managerial,
economic, market or political conditions.
DOUBTFUL - These credits have definite weaknesses inherent in Subs
u
tandard loans with added characteristics that are
severe enough to make further collection in ful
f l highly questionabl
a e and improbabl
a e 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 suffic
f ient cash flow to service their debt. All trends are negative and the
damage to the fin
f ancial condition of the Borrower can’t be reversed now or in the near future.
The fol
f lowing tabl
a e presents risk ratings by loan portfol
f io segment and origination year, which is the year of origination or
renewal.
December 31, 2024
Term Loans Amortized Cost Basis by Origination Year
Revolving
Loans
Amortized
Cost
asis
(In thousands)s
2024
2023
2022
2021
2020
Prior
T
Cost Basis
otal
CRE Nonowner Occupi
u ed
Pass
$
85,501
$
176,018
$ 343,072
$ 152,157
$ 130,650
$325,478
$
11,732
$ 1,224,608
Special mention
—
—
—
—
—
3,105
—
3,105
Subs
u
tandard or lower
—
1,515
1,260
—
3,281
17,241
—
23,297
Total CRE Nonowner
Occupi
u ed
85,501
177,533
344,332
152,157
133,931
345,824
11,732
1,251,010
Gross charge offs
—
—
—
—
—
—
—
—
Current period recoveries
—
—
—
—
—
2
—
2
Net charge offsf
—
—
—
—
—
2
—
2
CRE Owner Occupi
u ed
Pass
52,922
99,065
106,876
66,160
77,774
199,725
11,630
614,152
Special mention
—
222
4,991
227
—
2,133
—
7,573
Subs
u
tandard or lower
—
—
—
194
—
2,088
—
2,282
Total CRE Owner Occupi
u ed
52,922
99,287
111,867
66,581
77,774
203,946
11,630
624,007
Gross charge offs
—
—
—
—
—
—
—
—
MID PENN BANCORP, INC.
96

Current period recoveries
—
—
—
—
—
4
—
4
Net recoveries
—
—
—
—
—
4
—
4
Multifamily
Pass
4,843
66,119
118,568
101,871
40,450
78,070
2,771
412,692
Special mention
—
—
—
—
—
54
—
54
Subs
u
tandard or lower
—
—
—
—
—
154
—
154
Total Multifam
f
ily
4,843
66,119
118,568
101,871
40,450
78,278
2,771
412,900
Gross charge offs
—
—
—
—
—
—
—
—
Current period recoveries
—
—
—
—
—
—
—
—
Net charge offsf
—
—
—
—
—
—
—
—
Farmland
Pass
27,449
31,259
56,178
42,693
25,119
24,729
14,801
222,228
Special mention
—
128
—
—
—
2,163
190
2,481
Subs
u
tandard or lower
—
—
—
—
—
—
—
—
Total Farmland
27,449
31,387
56,178
42,693
25,119
26,892
14,991
224,709
Gross charge offs
—
—
—
—
—
—
—
—
Current period recoveries
—
—
—
—
—
—
—
—
Net charge offsf
—
—
—
—
—
—
—
—
Commercial and industrial
Pass
114,175
106,657
78,702
54,312
21,532
92,723
222,525
690,626
Special mention
—
62
503
31
—
3,534
4,498
8,628
Subs
u
tandard or lower
—
—
—
892
1,168
1,632
2,446
6,138
Total commercial and
industrial
114,175
106,719
79,205
55,235
22,700
97,889
229,469
705,392
Gross charge offs
—
(201)
—
—
(206)
(412)
—
(819)
Current period recoveries
—
—
—
—
—
1
—
1
Net charge offsf
—
(201)
—
—
(206)
(411)
—
(818)
Residential Construc
r
tion
Pass
34,275
37,222
15,559
—
—
2,007
10,336
99,399
Special mention
—
—
—
—
—
—
—
—
Subs
u
tandard or lower
—
—
—
—
—
—
—
—
Total Residential
34,275
37,222
15,559
—
—
2,007
10,336
99,399
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net recoveries
—
—
—
—
—
—
—
—
Other Construc
r
tion
Pass
66,711
94,619
104,439
11,664
10,983
11,928
25,827
326,171
Special mention
—
—
—
—
—
—
—
—
Subs
u
tandard or lower
—
—
—
—
—
—
—
—
Total Other Construc
r
tion
66,711
94,619
104,439
11,664
10,983
11,928
25,827
326,171
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net recoveries
—
—
—
—
—
—
—
—
MID PENN BANCORP, INC.
97

1-4 Family 1st Lien
Performing
27,580
59,762
45,946
34,743
42,727
98,891
2,915
312,564
Non-performing
—
—
—
—
211
817
—
1,028
Total 1-4 Family 1st Lien
27,580
59,762
45,946
34,743
42,938
99,708
2,915
313,592
Gross charge offs
—
—
—
—
—
(7)
—
(7)
Current period
recoveries
—
—
—
—
—
16
—
16
Net recoveries
—
—
—
—
—
9
—
9
1-4 Family Rental
Performing
28,735
51,488
88,594
59,397
35,222
69,890
2,009
335,335
Non-performing
—
147
—
—
595
559
—
1,301
Total 1-4 Family Rental
28,735
51,635
88,594
59,397
35,817
70,449
2,009
336,636
Gross charge offs
—
—
—
—
—
(2)
—
(2)
Current period
recoveries
—
—
—
—
—
22
—
22
Net recoveries
—
—
—
—
—
20
—
20
HELOC and Junior Liens
Performing
6,096
16,125
9,856
4,845
2,182
10,887
88,122
138,113
Non-performing
—
21
—
—
—
1,257
1,001
2,279
Total HELOC and Junior
Liens
6,096
16,146
9,856
4,845
2,182
12,144
89,123
140,392
Gross charge offs
—
—
(21)
—
—
—
—
(21)
Current period
recoveries
—
—
—
—
—
—
—
—
Net charge offs
—
—
(21)
—
—
—
—
(21)
Consumer
Performing
4,214
972
354
394
107
234
2,587
8,862
Non-performing
—
—
—
—
—
—
—
—
Total consumer
4,214
972
354
394
107
234
2,587
8,862
Gross charge offs
—
—
(2)
—
—
(50)
—
(52)
Current period
recoveries
—
—
1
—
—
38
—
39
Net charge offs
—
—
(1)
—
—
(12)
—
(13)
Total
Pass
385,876
610,959
823,394
428,857
306,508
734,660
299,622
3,589,876
Special mention
—
412
5,494
258
—
10,989
4,688
21,841
Subs
u
tandard or lower
—
1,515
1,260
1,086
4,449
21,115
2,446
31,871
Performing
66,625
128,347
144,750
99,379
80,238
179,902
95,633
794,874
Nonperforming
—
168
—
—
806
2,633
1,001
4,608
Total
$ 452,501
$ 741,401
$974,898 $529,580 $392,001
$949,299 $ 403,390
$4,443,070
MID PENN BANCORP, INC.
98

December 31, 2023
Term Loans Amortized Cost Basis by Origination Year
Revolving
Loans
Amortized
Cost Basis
(In thousands)s
2023
2022
2021
2020
2019
Prior
T
Cost Basis
otal
CRE Nonowner Occupi
u ed
Pass
$ 119,793
$
329,715
$ 160,583
$ 140,083
$
86,629
$ 267,210
$
10,030
$ 1,114,043
Special mention
—
—
—
—
6,009
7,926
—
13,935
Subs
u
tandard or lower
—
5,209
—
3,162
229
12,975
—
21,575
Total CRE Nonowner
Occupi
u ed
119,793
334,924
160,583
143,245
92,867
288,111
10,030
1,149,553
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net charge offs
—
f
—
—
—
—
—
—
—
CRE Owner Occupi
u ed
Pass
92,561
121,231
75,711
86,322
60,761
174,680
14,388
625,654
Special mention
—
—
—
—
—
190
—
190
Subs
u
tandard or lower
—
—
208
—
—
3,852
—
4,060
Total CRE Owner Occupi
u ed
92,561
121,231
75,919
86,322
60,761
178,722
14,388
629,904
Gross charge offs
—
—
—
—
—
(16)
—
(16)
Current period
recoveries
—
—
—
—
—
—
—
—
Net charge offs
—
f
—
—
—
—
(16)
—
(16)
Multifamily
Pass
26,776
44,450
105,406
41,713
23,118
65,480
1,881
308,824
Special mention
—
—
—
—
—
62
—
62
Subs
u
tandard or lower
—
—
—
—
—
173
—
173
Total Multifam
f
ily
26,776
44,450
105,406
41,713
23,118
65,715
1,881
309,059
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net charge offs
—
f
—
—
—
—
—
—
—
Farmland
Pass
32,525
61,405
45,211
29,628
7,926
20,956
11,962
209,613
Special mention
194
—
—
—
—
2,304
186
2,684
Subs
u
tandard or lower
—
—
—
—
—
345
48
393
Total Farmland
32,719
61,405
45,211
29,628
7,926
23,605
12,196
212,690
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net charge offs
—
f
—
—
—
—
—
—
—
Commercial and industrial
Pass
158,824
106,714
68,448
29,961
50,206
57,892
188,714
660,759
Special mention
—
89
2,224
—
227
2,200
4,391
9,131
Subs
u
tandard or lower
—
—
662
—
—
1,978
2,549
5,189
Total commercial and
industrial
158,824
106,803
71,334
29,961
50,433
62,070
195,654
675,079
MID PENN BANCORP, INC.
99

Gross charge offs
—
(100)
—
(111)
—
(27)
—
(238)
Current period
recoveries
—
—
—
—
—
—
—
—
Net charge offs
—
f
(100)
—
(111)
—
(27)
—
(238)
Residential construction
Pass
43,043
25,159
6,444
979
—
—
16,645
92,270
Special mention
—
—
—
—
—
—
—
—
Subs
u
tandard or lower
—
573
—
—
—
—
—
573
Total Residential
construc
r
tion
43,043
25,732
6,444
979
—
—
16,645
92,843
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net recoveries
—
—
—
—
—
—
—
—
Other construc
r
tion
Pass
110,553
156,055
48,214
21,378
10,247
5,856
6,617
358,920
Special mention
—
—
—
1,447
—
—
—
1,447
Subs
u
tandard or lower
—
—
—
—
—
2,257
—
2,257
Total Other construc
r
tion
110,553
156,055
48,214
22,825
10,247
8,113
6,617
362,624
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net recoveries
—
—
—
—
—
—
—
—
1-4 Family 1st Lien
Performing
77,801
51,651
41,133
48,748
9,348
106,353
2,240
337,274
Non-performing
—
—
37
218
—
1,613
—
1,868
Total 1-4 Family 1st Lien
77,801
51,651
41,170
48,966
9,348
107,966
2,240
339,142
Gross charge offs
—
—
—
—
—
(13)
—
(13)
Current period
recoveries
—
—
—
—
—
7
—
7
Net recoveries
—
—
—
—
—
(6)
—
(6)
1-4 Family Rental
Performing
62,897
90,092
64,766
38,672
16,831
64,309
1,885
339,452
Non-performing
—
—
56
1,252
—
1,177
—
2,485
Total 1-4 Family Rental
62,897
90,092
64,822
39,924
16,831
65,486
1,885
341,937
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
31
—
31
Net recoveries
—
—
—
—
—
31
—
31
HELOC and Junior Liens
Performing
17,936
11,460
5,711
2,962
1,684
8,236
83,598
131,587
Non-performing
—
—
—
—
—
1,208
—
1,208
Total HELOC and Junior
i
17,936
11,460
5,711
2,962
1,684
9,444
83,598
132,795
Gross charge offs
—
—
—
—
—
—
—
—
Current period
recoveries
—
—
—
—
—
—
—
—
Net recoveries
—
—
—
—
—
—
—
—
MID PENN BANCORP, INC.
100

Consumer
Performing
2,361
754
649
273
223
103
2,803
7,166
Non-performing
—
—
—
—
—
—
—
—
Total consumer
2,361
754
649
273
223
103
2,803
7,166
Gross charge offs
(86)
—
(10)
(9)
—
(30)
—
(135)
Current period
recoveries
26
—
—
1
—
5
—
32
Net charge offs
(60)
—
(10)
(8)
—
(25)
—
(103)
Total
Pass
584,075
844,729
510,017
350,064
238,887
592,074
250,237
3,370,083
Special mention
194
89
2,224
1,447
6,236
12,682
4,577
27,449
Subs
u
tandard or lower
—
5,782
870
3,162
229
21,580
2,597
34,220
Performing
160,995
153,957
112,259
90,655
28,086
179,001
90,526
815,479
Nonperforming
—
—
93
1,470
—
3,998
—
5,561
Total
$745,264
$1,004,557 $625,463
$446,798
$273,438
$809,335
$347,937
$4,252,792
Mid Penn had no loans classified as "Doubtful" as of December 31, 2024 and 2023. There was $861 thousand and $121
thousand in loans for which formal foreclosure proceedings were in process at December 31, 2024 and December 31, 2023,
respectively.
Collateral-Depe
e
ndent Loans
A fin
f ancial asset is considered to be collateral-dependent when the debtor is experiencing financial diffi
f culty and
repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of fin
f ancial
assets deemed collateral-dependent, Mid Penn elected the practical expedient to estimate expected credit losses based on
the collateral’s fai
f r value less cost to sell. In most cases, Mid Penn records a partial charge-off t
f
o reduc
d
e the loan’s carrying
value to the collateral’s fair value less cost to sell. Subs
u
tantially 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
December 31, 2024 were $22.6 million.
Allowance for
f
Credit Losses
Mid Penn’s ACL - loans methodology follows guidance within FASB ASC Subt
u opic 326-20. The ACL - loans is a
valuation account that is deducted fro
f
m 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 portfol
f io. The
ACL - loans is adjusted through the PCL and reduc
d
ed by the charge off of loan amounts, net of recoveries.
The loan loss estimation process involves procedur
d
es to appropriately consider the unique characteristics of Mid Penn’s
loan portfol
f io segments. When computing allowance levels, credit loss assumptions are estimated using a model that
categorizes loan pools based on loss history a
r
nd other credit trends and risk characteristics, including current conditions
and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts about the fut
f ur
t
e. Evaluations of the portfol
f io and individual credits are inherently
subj
u ective, as they require estimates, assumptions and judgments as to the fact
f
s 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 fut
f ur
t
e periods, evaluations of the overall loan portfol
f io, in light of the fact
f
ors and
forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.
Mid Penn estimates the ACL using relevant availabl
a e infor
f
mation, from internal and external sources, relating to past
events, current conditions and reasonabl
a e and suppor
u
tabl
a e for
f
ecasts. 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 fac
f
tors
affe
f cting Mid Penn as a whole, as well as specific loans. Factors considered include the fol
f lowing: lending process,
concentrations of credit, and peer group divergence. The quantitative and qualitative portions of the allowance are added
MID PENN BANCORP, INC.
101

together to determine the total ACL, which reflects management’s expectations of future conditions based on reasonabl
a e
and supportabl
a e for
f
ecasts.
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
f
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
f
such individual loans. In estimating the ACL for
f
the collective
component, loans are segregated into loan pools based on loan purpos
r
e codes and similar risk characteristics.
The commercial real estate and residential mortgage loan portfol
f io segments include loans for
f
both commercial and
residential properties that are secured by real estate. The underwriting process for
f
these loans includes analysis of the
financial position and strength of both the borrower and, if applicable, guarantor, experience with similar proje
o cts in the
past, market demand and prospects for
f
successful
f
completion of the proposed project within the established budget and
schedule, values of underlying collateral, availabi
a lity 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
u
analytical tools that consider historical and proje
o cted cash flo
f ws and
performance, in addition to analysis of the proposed project for income-producing properties. Additional support offer
f ed 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.
The commercial and industrial loan portfol
f io segment includes commercial loans made to many types of businesses for
f
various purpos
r
es, such as short-term working capital loans that are usually secured by accounts receivabl
a e and inventory,
r
equipment and fixed asset purchases that are secured by those assets, and term financing for
f
those within Mid Penn’s
geographic markets. Mid Penn’s credit underwriting process for
f
commercial and industrial loans includes analysis of
historical and proje
o cted cash flows and performance, evaluation of fin
f ancial strength of both borrowers and guarantors as
reflected in current and detailed fin
f ancial information, and evaluation of underlying collateral to support the credit.
The consumer loan portfol
f io segment is comprised of loans which are underwritten after evaluating a borrower’s capa
a
city,
credit and collateral. Several fac
f
tors 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
a
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 downtur
t
ns 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
f
credit losses for
f
loan pools. The
DCF is based off o
f
f 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 flo
f ws at the individual loan level. Contractua
t
l cash flo
f ws based on loan terms are adjusted for
f
PD, LGD and
prepayments to derive loss cash flo
f ws. 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 upda
u
ted quarterly by a third-party for each
applicable pool.
Mid Penn determined that reasonabl
a e and suppor
u
tabl
a e for
f
ecasts could be made for
f
a twelve-month period for
f
all of its loan
pools. To the extent the lives of the loans in the Loans held for investment (LHFI) portfol
f io extend beyond this forecast
period, Mid Penn uses a reversion period of four
f
quarters and reverts to the historical mean on a straight-line basis over the
remaining life o
f
f the loans.
Qualitative fact
f
ors used in the ACL methodology include the fol
f lowing:
•
Lending process
•
Concentrations of credit
•
Peer Group Divergence
The ACL for individual loans, such as non-accrua
r
l and PCD, that do not share risk characteristics with other loans is
measured as the diffe
f rence between the discounted value of expected future cash flo
f ws, based on the effective interest rate
MID PENN BANCORP, INC.
102

at origination, and the amortized cost basis of the loan, or the net realizable value. The ACL is the diffe
f rence between the
loan’s net realizable value and its amortized cost basis (net of previous charge-offs and defer
f red loan fee
f
s and costs),
except for
f
collateral-dependent loans. A loan is collateral dependent when the borrower is experiencing financial diffi
f culty
and repayment of the loan is expected to be provided subs
u
tantially through the sale of the collateral. The expected credit
loss for collateral-dependent loans is measured as the diffe
f rence between the amortized cost basis of the loan and the fair
value of the collateral, adjusted for
f
the estimated cost to sell. Fair value estimates for
f
collateral-dependent loans are derived
from appr
a
aised 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
ofte
f n if market conditions necessitate. Appraisals are obtained fro
f
m state-certifie
f d appr
a
aisers and are based on certain
assumptions, which may include construc
r
tion 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 acceptabl
a e, and values are adju
d sted
down for
f
costs associated with asset disposal. If the calculated expected credit loss is determined to be permanent or not
recoverabl
a e, 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 nonaccrua
r
l status. Mid Penn may also consider external credit
rating agency ratings for borrowers and for
f
non-commercial loans, FICO score or band, probabi
a lity 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
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 o
f
f 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 therefor
f
e not deemed PCD, any discounts or premiums included in the purchase price are accreted
(or amortized) over the contractua
t
l life o
f
f the individual loan.
Loans are charged off against the ACL, with any subsequent recoveries credited back to the ACL account. Expected
recoveries may not exceed the aggregate of amounts previously charged off and expected to be charged off.
The fol
f lowing tabl
a e presents the activity in the ACL - loans by portfol
f io segment for
f
the year ended December 31, 2024
and 2023:
(In
(
thousands)s
Balance at
December 31,
2023
Charge
offs
f
Recoveries
Net loans
(charged
off)
f
(Benefit
f )/
Provision
for credit
Year Ended
December 31,
2024
Commercial Real Estate
CRE Nonowner Occup
u ied
$
10,267
$
—
$
2
$
2
$
778
$
11,047
CRE Owner Occup
u ied
5,646
—
4
4
(407)
5,243
Multifamily
2,202
—
—
—
1,230
3,432
Farmland
2,064
—
—
—
(132)
1,932
Commercial and industrial
7,131
(819)
1
(818)
809
7,122
Construc
r
tion
Residential Construc
r
tion
1,256
—
—
—
(325)
931
Other Construction
2,146
—
—
—
(15)
2,131
Residential Mortgage
1-4 Family 1st Lien
1,207
(7)
16
9
287
1,503
1-4 Family Rental
1,859
(2)
22
20
(123)
1,756
HELOC and Junior Liens
389
(21)
—
(21)
24
392
Consumer
20
(52)
39
(13)
18
25
Total
$
34,187
$
(901) $
84
$
(817) $
2,144
$
35,514
(
)
(
)
(
)
(
)
,
(
)
(
)
(
)
(
)
,
,
MID PENN BANCORP, INC.
103

(In thousands)s
Balance at
December
31, 2022
CECL
Impact
PCD
Loans
Charge
offs
f
Recoveries
Net loans
(charged off)
f
recovered
Provision
/(Benefit)
for credit
losses
Year
Ended
December
31, 2023
Commercial Real Estate
CRE Nonowner Occupied
$
8,284
$
259
$
312
$
—
$
—
$
—
$
1,412
$
10,267
CRE Owner Occupi
u ed
2,916
91
2
(16)
—
(16)
2,653
5,646
Multifamily
1,111
35
—
—
—
1,056
2,202
Farmland
831
26
—
—
—
1,207
2,064
Commercial and industrial
4,593
6,601
5
(238)
—
(238)
(3,830)
7,131
Construc
r
tion
Residential Construc
r
tion
—
1,270
12
—
—
—
(26)
1,256
Other Construction
—
1,931
1
—
—
—
214
2,146
Residential Mortgage
1-4 Family 1st Lien
370
1,307
4
(13)
7
(6)
(468)
1,207
1-4 Family Rental
288
731
—
31
31
809
1,859
HELOC and Junior Liens
661
(230)
—
—
—
(42)
389
Consumer
29
154
(135)
32
(103)
(60)
20
Unallocated
(126)
(244)
—
—
—
370
—
Total
$
18,957
$ 11,931
$
336
$
(402) $
70
$
(332) $
3,295
$
34,187
MID PENN BANCORP, INC.
104

The fol
f lowing tabl
a e presents the ACL for
f
loans and the amortized cost basis of loans as of December 31, 2024 and
December 31, 2023:
(In thousands)s
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
Occupi
u ed
$
9,945
$
1,102
$
11,047
$
1,237,235
$
13,775
$
1,251,010
CRE Owner Occupi
u ed
5,243
—
5,243
623,461
546
624,007
Multifamily
3,432
—
3,432
412,746
154
412,900
Farmland
1,932
—
1,932
224,709
—
224,709
Commercial and industrial
6,785
337
7,122
700,740
4,652
705,392
Construc
r
tion
Residential Construc
r
tion
931
—
931
99,399
—
99,399
Other Construction
2,131
—
2,131
326,171
—
326,171
Residential mortgage
1-4 Family 1st Lien
1,503
—
1,503
312,564
1,028
313,592
1-4 Family Rental
1,756
—
1,756
336,460
176
336,636
HELOC and Junior Liens
392
—
392
138,113
2,279
140,392
Consumer
25
—
25
8,862
—
8,862
Total
$
34,075
$
1,439
$
35,514
$
4,420,460
$
22,610
$
4,443,070
(In thousands)s
ACL - Loans
Loans
December 31, 2023
Collectively
Evaluated for
f
Credit Loss
Individually
Evaluated for
f
Credit Loss
Total ACL -
Loans
Collectively
Evaluated for
f
Credit Loss
Individually
Evaluated for
f
Credit Loss
Total Loans
Commercial real estate
CRE Nonowner
Occupi
u ed
$
9,906
$
361
$
10,267
$
1,145,048
$
4,505
$
1,149,553
CRE Owner Occupi
u ed
5,646
—
5,646
627,995
1,909
629,904
Multifamily
2,190
12
2,202
308,886
173
309,059
Farmland
2,064
—
2,064
212,690
—
212,690
Commercial and industrial
6,419
712
7,131
673,793
1,286
675,079
Construc
r
tion
Residential Construc
r
tion
1,256
—
1,256
92,270
573
92,843
Other Construction
2,146
—
2,146
360,368
2,256
362,624
Residential mortgage
1-4 Family 1st Lien
1,207
—
1,207
337,267
1,875
339,142
1-4 Family Rental
1,857
2
1,859
341,236
701
341,937
HELOC and Junior Liens
389
—
389
131,587
1,208
132,795
Consumer
20
—
20
7,166
—
7,166
Total
$
33,100
$
1,087
$
34,187
$
4,238,306
$
14,486
$
4,252,792
MID PENN BANCORP, INC.
105

Modific
i
ations to Borrowers Expe
x
riencing Financial Diffi
f culty
From time to time, we may modify certain loans to borrowers who are experiencing financial diffi
f culty. In some cases,
these modific
f ations may result in new loans. Loan modifications to borrowers experiencing financial diffi
f culty may be in
the for
f
m of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension,
or a combination thereof, a
f
mong other things.
Information related to loans modified (by type of modification), whereby the borrower was experiencing financial
difficulty at the time of modification as of December 31, 2024, is set for
f
th in the fol
f lowing tabl
a e:
(In thousands)s
Interest
Only
Term
Extension
Combination:
Interest Only
and
Term Extension
Total
% of Total
Class of
Financing
Receivable
Year ended December 31, 2024
Commercial and industrial
$
—
$
—
$
287
$
287
0.04 %
1-4 Family Rental
—
184
—
184
0.05
HELOC and Junior Liens
—
—
92
92
0.07
Total
$
—
$
184
$
379
$
563
The fin
f ancial effe
f cts of the interest-only loan modifications reduced the monthly payment amounts for
f
the borrower and
the term extensions in the table above added a weighted-average of 2.0 years to the life of the loans, which also reduced the
monthly payment amounts for
f
the borrowers.
As of December 31, 2024, there were no defau
f
lted troubled debt restructur
t
ed loans, as all troubled debt restructured loans
were current with respect to their associated forbearance agreements. There were also no defaults on troubled debt
restructur
t
ed loans within twelve months of restructur
t
e dur
d
ing 2023.
Only
i
Combination:
Interest Only and
i
l
% of Total Class
of Financing
i
ble
Interest Only
Term Extension
Term Extension
Total
Re
Y
ceivabl
a
d d
b
31, 2023
Commercial real estate
CRE Owner Occupi
u ed
$
51
$
—
$
180
$
231
0.04 %
Total Commercial real estate
51
—
180
231
0.02
Commercial and industrial
—
150
—
150
0.02
Construc
r
tion
Other Construction
—
700
—
700
0.19
Total Construction
—
700
—
700
0.15
Total loans
$
51
$
850
$
180
$
1,081
MID PENN BANCORP, INC.
106

Note 5 - Premises and Equipment
q
p
The fol
f lowing is a summary of premises and equipment as of December 31:
(In thousands)s
2024
2023
Land
$
6,251
$
6,663
Buildings
28,948
29,680
Furniture, fix
f tures, and equipment
23,656
23,091
Leasehold improvements
3,317
2,469
Capi
a tal expenditures in process
4,941
1,165
Total cost
67,113
63,068
Less accumulated depreciation
(28,307)
(26,159)
Total premises and equipment
$
38,806
$
36,909
Depreciation expense was $4.9 million in 2024, $4.9 million in 2023, and $4.3 million in 2022.
Note 6 - Goodwill and Intangible Assets
g
The fol
f lowing tabl
a e summarizes the changes in goodwill:
For the Years Ended
December 31,
(In
(
thousands)
2024
2023
Goodwill balance, beginning of year
$
127,031
$
114,231
Bruns
r
wick Acquisition
—
12,800
Commonwealth Benefits Group Acquisition
1,129
—
Goodwill balance, end of year
$
128,160
$
127,031
On July 31, 2024, Mid Penn acquired the insurance business and related accounts of a full-service employee benefit
f s fir
f m
that serves mid to large employers across central and eastern Pennsylvania, northern Maryl
r and, and northern Virginia.
Goodwill totaling $1.1 million was booked as a result of this business combination.
On May 19, 2023, Mid Penn purchased Brun
r
swick Bank in a business combination. Goodwill totaling $12.8 million was
booked as a result of this business combination.
The fol
f lowing tabl
a e summarizes the changes in core deposit intangible.
For the Years Ended
December 31,
(In
(
thousands)
2024
2023
2022
Core deposit intangible balance, beginning of year
$
4,649
$
4,964
$
7,282
Bruns
r
wick core deposit intangibles
—
999
—
Riverview (adju
d stment) acquisition
—
—
(705)
Amortization of core deposit intangibles
1,267
1,314
1,613
Core deposit and other intangible balances, end of year
$
3,382
$
4,649
$
4,964
MID PENN BANCORP, INC.
107

The fol
f lowing tabl
a e shows the amortization expense for
f
future periods:
(In thousands)s
2025
$
1,035
2026
812
2027
591
2028
370
2029
260
2030-thereafte
f r
314
Total
$
3,382
Customer List
i
Intangible
As a result of the Commonwealth Financial Group and Riverview Acquisitions, Mid Penn recorded a customer list
intangible asset included in total intangible assets related to the insurance and wealth management customers assumed in
the acquisitions. This intangible is amortized as an expense over ten years using the sum of the years’ amortization method.
The fol
f lowing tabl
a e summarizes the changes in the customer list intangible dur
d
ing the years ended December 31:
(In thousands)s
2024
2023
Customer list intangible balance, beginning of year
$
1,830
$
2,275
Commonwealth Financial Group acquisition
1,481
—
Amortization of customer list intangible
512
445
Customer list intangible, end of year
$
2,799
$
1,830
The fol
f lowing tabl
a e shows the amortization expense for
f
future periods:
(In thousands)s
2025
$
608
2026
532
2027
456
2028
380
2029
304
2030-thereafte
f r
519
Total
$
2,799
Note 7 - Leases
Mid Penn has operating and fin
f ance leases for certain premises and equipment.
Operating and finance lease ROU assets, as well as operating lease liabi
a lities, are presented as separate line items on the
Consolidated Balance Sheet, while finance lease liabi
a lities are classified as a component of long-term debt.
MID PENN BANCORP, INC.
108

Suppl
u
emental consolidated balance sheet information for
f
each of the lease classifications as of December 31 was as
follows:
2024
2023
(Dollars in thousands)s
Operating
Leases
Finance
Lease
Operating
Leases
Finance
Lease
ROU
$
7,699
$
2,548
$
8,953
$
2,727
Lease liabi
a lity
8,092
3,063
9,285
3,197
Weighted average remaining lease term (in years)
5.12
14.17
5.60
15.17
Weighted average discount rate
3.68%
3.81%
3.66%
3.81%
Interest expense on fin
f ance lease liabi
a lities is included in other interest expense, while all other lease costs are included in
occupa
u
ncy expense on Mid Penn’s Consolidated Statements of Income. Following is a summary of lease costs during the
years ended December 31:
(In thousands)s
2024
2023
2022
Finance lease cost:
Amortization of ROU asset
$
179
$
180
$
180
Interest expense on lease liabi
a lity
119
123
127
Total fin
f ance lease cost
298
303
307
Operating lease cost
2,322
2,081
2,057
Subl
u ease income
(21)
(29)
(24)
Total lease costs
$
2,599
$
2,355
$
2,340
The rental expense paid to related parties was $274 thousand for
f
each of 2024, 2023 and 2022.
Suppl
u
emental cash flo
f w infor
f
mation related to operating and finance leases for the years ended December 31 was as
follows:
(In thousands)s
2024
2023
Cash paid for amounts included in the measurement of lease liabi
a lities:
Operating cash flo
f ws from fin
f ance leases
$
119
$
123
Operating cash flo
f ws from operating leases
2,382
2,556
Financing cash flo
f ws from fin
f ance leases
134
93
MID PENN BANCORP, INC.
109

A matur
t
ity analysis of operating and finance lease liabi
a lities and a reconciliation of the undiscounted cash flo
f ws to the total
operating and finance lease liabi
a lity amounts is presented below.
December 31, 2024
(In thousands)s
Operating Leases
Finance Lease
Lease payments due
d
:
2025
$
2,361
$
260
2026
2,179
260
2027
1,878
260
2028
1,136
259
2029
807
276
2030 and thereafte
f r
617
2,677
Total lease payments
8,978
3,992
Less: imputed interest
(886)
(929)
Present value of lease liabi
a lities
$
8,092
$
3,063
The fut
f ur
t
e minimum payments to related parties are $185 thousand for
f
2025, $178 thousand for
f
2026, 2027, 2028 and
2029 and $638 thousand thereafte
f r.
There were no sale and leaseback transactions or leveraged leases as of December 31, 2024 or 2023. There were no leases
that had not commenced as of December 31, 2024.
Note 8 - Deposits
p
Deposits consisted of the following as of December 31:
(Dollars in thousands)s
2024
2023
Noninterest-bearing demand deposits
$
759,169
$
801,312
Interest-bearing demand deposits
1,101,444
947,372
Money market
958,051
850,674
Savings
260,258
288,404
Total demand and savings
3,078,922
2,887,762
Time
1,611,005
1,458,450
Total deposits
$ 4,689,927
$ 4,346,212
The schedul
d ed maturities of time deposits at December 31, 2024 were as follows:
Time Deposits
(In
(
thousands)s
Less than $250,000
$250,000 or more
Maturing in 2025
$
1,089,099
$
356,781
Maturing in 2026
104,814
15,638
Maturing in 2027
24,083
1,222
Maturing in 2028
10,503
264
Maturing in 2029
4,790
250
Maturing thereafter
3,007
554
$
1,236,296
$
374,709
MID PENN BANCORP, INC.
110

Mid Penn had $319.8 million in brokered certificates of deposits as of December 31, 2024 and $244.8 million as of
December 31, 2023. As of December 31, 2024 and 2023, Mid Penn had $83.7
i
milli
llion and $96.7
i
millllio o
n f CDAR
(Certific
f ate of Deposit Account Registry) deposits, respectively.
Deposits and other funds from related parties held by Mid Penn at December 31, 2024 and 2023 amounted to $31.8 million
and $48.3 million, respectively.
Note 9 - Short-term Borrowings
g
Total short-term borrowings were $2.0 million as of December 31, 2024 and $241.5 million as of December 31, 2023,
respectively. Short-term borrowings generally consist of fed
f
eral 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 our investment in the
common stock of the FHLB and by a blanket lien on selected loan receivabl
a es comprised principally of real estate secured
loans within the Bank’s portfol
f io totaling $2.3 billion at December 31, 2024. The Bank had short-term borrowing capa
a
city
from the FHLB up to the Bank’s unused borrowing capa
a
city of $1.5 billion (equal to $1.6 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
December 31, 2024. No draws have been made on these lines of credit and on December 31, 2024 and 2023, the balance
was $0.
Note 10 - Long-term Debt
g
The fol
f lowing tabl
a e presents a summary of long-term debt as of December 31:
(Dollars in thousands)s
December 31, 2024
December 31, 2023
FHLB fixed rate instrum
r
ents:
Due January 2024, 1.10%
$
—
$
10,000
Due March 2024, 5.60%
—
25,000
Due February 2
r
026, 4.51%
20,000
20,000
Due August 2026, 4.80%
523
782
Due February 2
r
027, 6.71%
17
24
Total FHLB fix
f ed rate instruments
20,540
55,806
Lease obligations included in long-term debt
3,063
3,197
Total long-term debt
$
23,603
$
59,003
Mid Penn prepaid no FHLB fixed rate instrum
r
ents during the years ended December 31, 2024 and 2023.
As a member of the FHLB, the Bank can access a number of credit products which are utilized to provide liquidity. As of
December 31, 2024, and 2023, the Bank had long-term debt outstanding in the amount of $23.6 million and $59.0 million,
respectively, consisting of FHLB fixed rate instrum
r
ents, and a fin
f ance lease liabi
a lity.
The FHLB fix
f ed rate instruments are secured under the terms of a blanket collateral agreement with the FHLB consisting
of FHLB stock and qualifying Mid Penn loan receivabl
a es, principally real estate secured loans. Mid Penn also obtains
letters of credit from the FHLB to secure certain public fund deposits of municipality and school district customers who
agree to use of the FHLB letters of credit. These FHLB letter of credit commitments totaled $156.0 million and $153.5
million as of December 31, 2024 and 2023, respectively.
During the fir
f st quarter of 2019, Mid Penn entered into a lease agreement for
f
one facility under a non-cancelable finance
lease, which commenced March 1, 2019 and expires February 2
r
8, 2039 and is included in long-term debt on the
Consolidated Balance Sheets. See "Note 7 - Leases", for more infor
f
mation related to Mid Penn’s fin
f ance lease obligation.
The aggregate principal amounts due
d
on FHLB fixed rate instrum
r
ents subs
u
equent to December 31, 2024 are as fol
f lows:
MID PENN BANCORP, INC.
111

(In thousands)s
2025
$
318
2026
20,220
2027
2
Thereafte
f r
—
$
20,540
Note 11 - Subordinated Debt and Trust Prefer
f
red Securities
Subordinated Debt Assumed Nov
N
ember 2021 with the Riverview Acquisi
i tion
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
f
regulatory r
r
eporting purposes.
The Riverview Notes were entered into by Riverview on October 6, 2020 with certain qualifie
f d institut
t ional buyers and
accredited institutional investors. The Riverview Notes have a matur
t
ity date of October 15, 2030 and initially bear interest,
payabl
a e semi-annually, at a fix
f ed 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 secured overnight financing rate ("SOFR") plus 563 bp, payabl
a e quarterly until maturity. Mid
Penn may redeem the Notes at par, in whole or in part, at its option, anytime beginning on October 15, 2025.
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 Subor
u
dinated 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 capi
a tal for
f
regulatory c
r
apital purpos
r
es.
The December 2020 Notes bear interest at a rate of 4.50% per year for
f
the fir
f st 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
December 2020 Notes are floating will at no time be less than 4.50%. 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, subj
u ect to any required regulatory a
r
ppr
a
ovals.
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 fai
f ls to be deductible for
f
United States federal income tax purpos
r
es 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 accrue
r
d 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
u
the
bankrupt
r
cy, insolvency, liquidation, receivership or similar event of Mid Penn or Mid Penn Bank, its principal banking
subs
u
idiary. Related parties held $750 thousand of the December 2020 Notes as of December 31, 2024 and 2023.
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 Mid Penn Subordinated Notes due March 2030 (the "March 2020 Notes"). As a result of Mid Penn’s
merger with Riverview on November 30, 2021, $6.9 million of the March 2020 Notes balance were redeemed as Riverview
was a holder of the March 2020 Notes.
h
Th b
e b lalance of March 2020 Notes outstandidi g
ng as of Dece b
mber 31, 2023 was $8.1
ill
million T
.
he March 2020 Notes held at December 31, 2024 are treated as Tier 2 capital for regulatory c
r
apital purpos
r
es.
The March 2020 Notes bear interest at a rate of 4.00% per year for the first fiv
f e 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 fiv
f e years afte
f r issuance and will be payabl
a e
MID PENN BANCORP, INC.
112

quarterly in arrears thereafte
f r on March 30, June 30, September 30 and December 30. The March 2020 Notes will mature
on March 30, 2030 and are redeemable in whole or in part, without premium or penalty, at any time on or afte
f r March 30,
2025 and prior to March 30, 2030. Additionally, if all or any portion of the March 2020 Notes cease to be deemed Tier 2
Capi
a tal, Mid Penn may redeem, on any interest payment date, all or part of the 2020 Notes. In the event of a redemption
described in the previous sentence, Mid Penn will redeem the March 2020 Notes at 100% of the principal amount of the
March 2020 Notes, plus accrue
r
d and unpaid interest thereon to but excluding the date of redemption.
Holders of the March 2020 Notes may not accelerate the matur
t
ity of the March 2020 Notes, except upon
u
the bankrupt
r
cy,
insolvency, liquidation, receivership or similar event of Mid Penn or Mid Penn Bank, its principal banking subs
u
idiary.
Related parties held $1.7 million of the March 2020 Notes as of December 31, 2024 and 2023.
Note 12 - 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 purpos
r
es. During the year ended December 31, 2024, Mid Penn entered into outstanding derivative
contracts designated as hedges. Mid Penn’s fre
f e-standing derivative fin
f ancial instruments are required to be carried at their
fair value on the Consolidated Balance Sheets.
Mortgage
t
Banking Derivative Fin
F ancial Ins
I
truments
In connection with its mortgage banking activities, Mid Penn entered into commitments to originate certain fixed-rate
residential mortgage loans for customers, also refer
f red to as interest rate locks. In addition, Mid Penn entered into forward
commitments for
f
the fut
f ur
t
e sales or purchases of mortgage-backed securities to or fro
f
m third-party counterpa
r
rties to hedge
the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for
f
sale. Forward
sales commitments may have also be in the for
f
m of commitments to sell individual mortgage loans at a fix
f ed price at a
future date. The amount necessary to settle each interest rate lock was based on the price that secondary market investors
would pay for loans with similar characteristics, including interest rate and term, as of the date fai
f r value is measured.
During the year ended December 31, 2023, Mid Penn did not participate in mortgage banking derivative activities.
Information related to mortgage banking derivative activity is set forth in the following tabl
a e:
December 31, 2024
December 31, 2023
(In t
I
ho
t
usands)s
Notional
Amount
Asset (Liability)
Fair Value
Notional
Amount
Asset (Liability)
Fair Value
Interest Rate Lock Commitments
Positive Fair Values
$
120
$
1
$
—
$
—
Negative Fair Values
1,084
(4)
—
—
Forward Commitments
Positive Fair Values
2,380
7
—
—
Negative Fair Values
$
1,167
$
(6) $
—
$
—
For the year ended December 31, 2024, 2023, and 2022, Mid Penn recorded net gains fro
f
m mortgage banking hedging
activity of $10 thousand, $324 thousand, and $1.5 million, respectively.
The fol
f lowing tabl
a e presents derivative fin
f ancial instruments and the amount of the net gains or losses recognized within
other noninterest income on the Consolidated Statements of Income for the years ended December 31:
(In thousands)s
2024
2023
Interest Rate Lock Commitments
$
(3) $
37
Forward Commitments
14
287
Total
$
11
$
324
MID PENN BANCORP, INC.
113

Loan-level Int
I erest Rate Swa
S
ps
a
Mid Penn enters into loan-level interest rate swaps
a
with certain qualifyi
f ng commercial loan customers to meet their interest
rate risk management needs. Mid Penn simultaneously enters into interest rate swaps with dealer counterpa
r
rties, with
identical notional amounts and terms. The net result of the offsetting customer and dealer counterpa
r
rty swap a
a
greements 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
a
is set for
f
th in the fol
f lowing tabl
a e:
(Dollars in thousands)s
December 31, 2024
December 31, 2023
Interest rate swaps on loans with customers
Notional amount
$
217,150
$
187,192
Weighted average remaining term (years)
5.11
6.24
Receive fixed rate (weighted average)
4.68 %
4.59 %
Pay variabl
a e rate (weighted average)
6.64 %
7.50 %
Estimated fair value (1)
$
11,118
$
10,484
(Dollars in thousands)s
December 31, 2024
December 31, 2023
Interest rate swaps on loans with correspondents
Notional amount
$
217,150
$
187,192
Weighted average remaining term (years)
5.11
6.24
Receive variable rate (weighted average)
6.64 %
7.50 %
Pay fix
f ed rate (weighted average)
4.68 %
4.59 %
Estimated fair value (2)
$
11,118
$
10,484
(1) The net amount of the estimated fai
f r value is disclosed in Other Liabilities on the Consolidated Balance Sheet.
(2) The net amount of the estimated fai
f r value is disclosed in Other Assets on the Consolidated Balance Sheet.
Cash Flow Hedges of I
o
nt
I erest Rate Risk
Mid Penn’s objectives in using interest rate derivatives are to reduc
d
e 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. During the year ended December 31, 2024, Mid Penn entered into interest rate
swaps designated as cash flo
f w hedges to hedge the cash flo
f ws associated with existing brokered CDs.
Information related to cash flo
f w hedges is set forth in the following table:
(Dollars in thousands)s
December 31, 2024
December 31, 2023
Cash flow hedges
Notional amount
$
295,000
$
190,000
Weighted average remaining term (years)
1.55
2.22
Pay fix
f ed rate (weighted average)
3.64 %
3.74 %
Receive variable rate (weighted average)
4.10 %
4.07 %
Estimated fair value (1)
$
2,590
$
1,460
(1) Estimated fai
f r value, net of accrue
r
d interest receivabl
a e, is disclosed in Other Assets on the Consolidated Balance Sheet.
For derivatives designated and that qualify a
f
s cash flo
f w hedges of interest rate risk, the unrealized gain or loss on the
derivative is recorded in AOCI and subs
u
equently reclassified into interest income in the same period dur
d
ing 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 variabl
a e-rate liabi
a lities. During the next twelve months ended December 31,
2025, Mid Penn estimates that an additional $1.4 million will be reclassified as a decrease to interest expense.
MID PENN BANCORP, INC.
114

Note 13 - Fair Value Measurement
h
The Corpor
r
ation uses estimates of fair valu
i
e in a
l
ppl
a
yiyi g
ng va irious accounting sta d
nda d
rds for
f
its cons lolididat d
ed fifinancial
statements on
iei hther a recur iri g
ng or non-recu i
rri g
ng ba isis. Fair valu
i
e i d
s defin
f
d
ed as hthe p irice to sellll an asset or transfer a
liliabibi
a lity
lity in an orde lrly transac ition between
i
willi
lli g
ng and ablbl
a e market par iticipants. Midid Penn groups its assets and l
d liabibi
a lili ities
measur d
ed at fair valu i
e in three hihierar h
chy l
y lev lels, based on the
b
observabibi
a lity
lity and transparency of the inputs. The fai
f r value
hierarchy is as fol
f lows:
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 observabl
a e either
directly or indirectly, for
f
subs
u
tantially the ful
f l term of the asset or liabi
a lity.
Level 3 - Inputs that are largely unobservabl
a e, as little or no market data exists for the instrument being valued.
A description of the valuation methodologies used for instrum
r
ents measured at fair value, as well as the general
classification of such instrum
r
ents pursuant to the valuation hierarchy, is set for
f
th below.
There were no transfers of assets between fair value Level 1 and Level 2 during the year ended December 31, 2024 or the
year ended December 31, 2023.
The fol
f lowing tabl
a es illustrate the assets and liabi
a lities measured at fair value on a recurring basis and reported on the
Consolidated Balance Sheets:
December 31, 2024
(In thousands)s
Level 1
Level 2
Level 3
Total
Availabl
a e-for-sale securities:
U.S. Treasury and U.S. government agencies
$
—
$
21,507
$
—
$
21,507
Mortgage-backed U.S. government agencies
—
202,944
—
202,944
State and political subdi
u
vision obligations
—
3,596
—
3,596
Corporate debt securities
—
32,430
—
32,430
Equity securities
428
—
—
428
Loans held for
f
sale
—
7,064
—
7,064
Other assets:
Derivative assets
—
13,708
—
13,708
Other liabi
a lities:
Derivative liabi
a lities
—
11,118
—
11,118
December 31, 2023
(In thousands)s
Level 1
Level 2
Level 3
Total
Availabl
a e-for-sale securities:
U.S. Treasury and U.S. government agencies
$
—
$
35,649
$
—
$
35,649
Mortgage-backed U.S. government agencies
—
152,683
—
152,683
State and political subdi
u
vision obligations
—
3,646
—
3,646
Corporate debt securities
—
31,577
—
31,577
Equity securities
438
—
—
438
Loans held for
f
sale
—
3,855
—
3,855
Other assets:
Derivative assets
—
11,944
—
11,944
Other liabi
a lities:
Derivative Liabi
a lities
—
10,484
—
10,484
MID PENN BANCORP, INC.
115

The valuation methodologies and assumptions used to estimate the fair value for
f
the items in the preceding tables are as
follows:
Availabl
a e for
f
sale investment securities - The fair value of equity and debt securities classified as availabl
a e for
f
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 t
r
o 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
q
y
-
h
The f iai
f r v lalue of eq iui yty secu iri ities with r
d
eadilily d
y deter i
minablbl
a e f iai
f r v lalue i
s is reco d
rd d
ed on hthe Cons lolididat d
ed
Balance Sheet, with realilized a d
nd unr
l
ealiz d
ed gains a d
nd losses reported i
d in o hther expense on the Cons lolididat d
ed Statements of
Income.
Loan h
s h leld f
d for
f
sale - Thihis cat g
egory i
y i
r
ncludes mor gtg g
ag l
e loans heldld for s lale that are measur d
ed at fair value. Fair values as of
December 31, 2024 were measur d
ed as hthe p irice hthat seco d
nda y
ry ma k
rket investors were offe iri g
ng fo l
r loans
i
wi hth
isi i
milar
h
characteris itics.
De iriva itiv
i
e instrum
r
ents - Interest rate swaps
a
are measured b
d by alterna itive p iri ici g
ng sources
i
wi hth reasonablbl
a
l
e lev lels of p irice
transparen y
cy in ma k
rkets that are not active. Based on the complex natur
t
e of i
f interest rate swap a
a
greements, the ma k
rkets
hthes
i
e instrum
r
ents tr d
ad
i
e in are not as effifi
f
icient a d
nd ar
l
e les l
s liq iuid than that of the more mature Level 1 ma k
rkets.
h
These
ma k
rket d
s d h
o however have compar b
able, observablbl
a
i
e input i
s in whihi h
ch an lalternative p iri ici g
ng sources values hthese assets in order
to ar irive at a f iai
f r market v lalue. These h
characteris itics lclas isi y
fy interest rate swap g
agreements as Level 2.
Mortgage banking derivatives
g g
g
- represent the fai
f r value of mortgage banking derivatives in the for
f
m of interest rate locks
and for
f
ward commitments with secondary market investors and the fai
f r value of interest rate swaps. The fai
f r values of the
Corporation’s interest rate locks, for
f
ward commitments and interest rate swaps represent the amounts that would be
required to settle the derivative fin
f ancial instruments at the balance sheet date. These characteristics classify interest rate
swap agreements as Level 2. See "Note 12 - Derivative Financial Instruments," for
f
additional infor
f
mation.
Certain fin
f ancial assets and fin
f ancial liabi
a lities 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 fin
f ancial
instruments measured at fai
f r value on a nonrecurring basis:
December 31, 2024
(In t
I
housands)s
Level 1
Level 2
Level 3
Total
Individually evaluated loans, net of ACL
$
—
$
—
$
21,171
$
21,171
Foreclosed assets held for sale
—
—
44
44
December 31, 2023
(In t
I
housands)s
Level 1
Level 2
Level 3
Total
Individually evaluated loans, net of ACL
$
—
$
—
$
13,399
$
13,399
Foreclosed assets held for sale
—
—
293
293
Net loans - This category c
r
onsists 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 2024 and 2023, 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
observabl
a e. Appraisals may be adjusted downward by management for
f
qualitative fact
f
ors such as economic conditions and
estimated liquidation expenses.
Foreclosed assets held for sale - Values are based on appr
a
aisals that consider the sales prices of property in the proximate
vicinity.
MID PENN BANCORP, INC.
116

The fol
f lowing tabl
a e presents additional infor
f
mation about the valuation techniques for
f
level 3 assets measured at fair value
on a nonrecurring basis.
December 31, 2024
(In t
I
housands)s
Fair
Value
Valuation
Technique
Signific
f ant
Unobservable
Input
Range of
Inputs
Weighted
Average
Individually evaluated loans, net of ACL
$ 21,171
Appraisal of
collateral
Appraisal
adju
d
stments
—% - 100%
5.6%
Foreclosed assets held for sale
44
Appraisal of
collateral
Appraisal
adju
d
stments
26% - 26%
26.0%
December 31, 2023
(In t
I
housands)s
Fair
Value
Valuation
Technique
Significant
Unobservabl
a e
Input
Range of Inputs
Weighted
Average
Individually evaluated loans, net of ACL
$ 13,399
Appraisal of
collateral
Appraisal
adjd ustments
—%
- 100%
5.7%
Foreclosed assets held for sale
293
Appraisal of
collateral
Appraisal
adju
d stments
25%
-
94%
64.5%
The fol
f lowing tabl
a es present the carrying amount, fai
f r value, and placement in the fair value hierarchy of Mid Penn’s
financial instrum
r
ents as of:f
December 31, 2024
Estimated Fair Value
(In t
I
housands)s
Carrying
Amount
Level 1
Level 2
Level 3
Total
Financial instrum
r
ents - assets
Cash and cash equivalents
$
70,564
$
70,564
$
—
$
—
$
70,564
Availabl
a e-for-sale securities
260,477
—
260,477
—
260,477
Held-to-maturity securities
382,447
—
340,648
—
340,648
Equity securities
428
428
—
—
428
Loans held for
f
sale
7,064
—
7,064
—
7,064
Net loans
4,407,556
—
—
4,430,623
4,430,623
Restricted investment in bank stocks
7,461
7,461
—
7,461
Accrue
r
d interest receivabl
a e
26,846
26,846
—
—
26,846
Derivative assets
13,708
—
13,708
—
13,708
Financial instrum
r
ents - liabi
a lities
Deposits
$
4,689,927
$
—
$
4,684,548
$
—
$
4,684,548
Short-term borrowings
2,000
—
2,000
—
2,000
Long-term debt (1)
20,540
—
19,120
—
19,120
Subor
u
dinated debt
45,741
—
42,811
—
42,811
Accrue
r
d interest payable
13,484
13,484
—
—
13,484
Derivative liabi
a lities
11,118
—
11,118
—
11,118
(1)
Long-term debt excludes fin
f ance lease obligations.
MID PENN BANCORP, INC.
117

December 31, 2023
Estimated Fair Value
(In t
I
housands)s
Carrying
Amount
Level 1
Level 2
Level 3
Total
Financial instrum
r
ents - assets
Cash and cash equivalents
$
96,763
$
96,763
$
—
$
—
$
96,763
Availabl
a e-for-sale securities
223,555
—
223,555
—
223,555
Held-to-maturity securities
399,128
—
357,521
—
357,521
Equity securities
438
438
—
—
438
Loans held for
f
sale
3,855
—
3,855
—
3,855
Net loans
4,218,605
—
—
4,221,926
4,221,926
Restricted investment in bank stocks
16,768
—
16,768
—
16,768
Accrue
r
d interest receivabl
a e
25,820
25,820
—
—
25,820
Derivative assets
11,944
—
11,944
—
11,944
Financial instrum
r
ents - liabi
a lities
Deposits
$
4,346,212
$
—
$
4,337,723
$
—
$
4,337,723
Short-term debt
241,532
—
241,532
—
241,532
Long-term debt (1)
55,806
—
55,081
—
55,081
Subor
u
dinated debt
46,354
—
39,515
—
39,515
Accrue
r
d interest payable
14,257
14,257
—
—
14,257
Derivative liabi
a lities
10,484
—
10,484
—
10,484
(1)
Long-term debt excludes fin
f ance lease obligations
The Bank’s outstanding and unfunde
f
d credit commitments and financial standby letters of credit were deemed to have no
significant fai
f r value as of December 31, 2024 and 2023.
Note 14 - Postretirement Benefit
f
Plans
Mid Penn has an unfunde
f
d noncontributory d
r
efin
f ed benefit plan for
f
directors, which provides defin
f ed benefits based on the
respective director’s years of service, as well as a postretirement healthcare and life i
f
nsurance benefit plan, which is
noncontributory,
r
covering certain ful
f l-time employees. Mid Penn also assumed noncontributory d
r
efin
f ed benefit pension
plans as a result of the acquisitions of Scottdale on January 8, 2018 and Riverview on November 30, 2021. None of Mid
Penn’s plans contained a promised interest crediting rate.
Service costs related to plans benefiting Mid Penn employees are reported as a component of salaries and employee
benefits on the Consolidated Statements of Income, while interest costs, expected return on plan assets, amortization
(accretion) of prior service cost, and settlement gain are reported as a component of other income. Service costs, interest
costs, and amortization of prior service costs related to plans benefiting Mid Penn’s nonemployee directors are reported as
a component of director fees and benefits
f
expense within the other expense line item on the Consolidated Statement of
Income.
The accrue
r
d benefit
f
liabi
a lity, related income statement impacts, and other significant aspects of the plans are detailed
below.
Life
i
Insurance
f
- Full-time employees who had at least ten years of service as of January 1, 2008 and retire with the Bank
afte
f r age 55 and at least 20 years of service are eligible for term life i
f
nsurance coverage. The insurance amount will be $50
thousand until age 65. Afte
f r age 65, the insurance amount will decrease by $5 thousand per year until age 74. Thereafte
f r,
MID PENN BANCORP, INC.
118

the insurance amount will be $5 thousand. The payment of the life i
f
nsurance premium by the Corporatio s
n hall terminate at
any time if the retired employee obtains other employment.
Health Benefit
e
Plan
f
- Full-time employees who had at least 10 years of service as of January 1, 2008 and who retire at age
55 or later, afte
f r completion of at least 20 years of service, are eligible for medical benefits. Medical benefits are provided
for up t
u
o fiv
f e years afte
f r retirement. Employees who retired prior to December 31, 2015 may elect the least expensive
single coverage in the employer’s group medical plan. If the retiree becomes eligible for Medicare dur
d
ing the five year
duration of coverage, the Bank will pay, at its discretion, premiums for single 65-special coverage or similar supplemental
coverage. For those employees who retired between September 18, 2015 and December 31, 2015, the Bank will only pay
up to $5 thousand towards such medical coverage. Employees who retired afte
f r December 31, 2015 may not participate in
the employer’s group medical plan. Instead, the Bank will reimburse the retiree for up t
u
o $5 thousand (grossed up b
u
y
36.79% as of December 31, 2024) in medical costs. The reimbursement shall terminate at any time dur
d
ing the five-year
period if the retired employee obtains other employment or the retired employee dies.
The fol
f lowing tabl
a es provide a reconciliation of the changes in the plan’s health and life i
f
nsurance benefit obligations and
fair value of plan assets for the years ended December 31, 2024 and 2023, and a statement of the funded status at
December 31, 2024 and 2023.
(In thousands)s
December 31,
Change in benefit obligations:
2024
2023
Benefit obligations, January 1
$
271
$
297
Service cost
1
1
Interest cost
11
13
Change in experience
(28)
(22)
Change in assumptions
(7)
—
Benefit payments
(22)
(18)
Benefit obligations, December 31
$
226
$
271
Change in fair value of plan assets:
Fair value of plan assets, January 1
$
—
$
—
Employer contributions
22
18
Benefit payments
(22)
(18)
Fair value of plan assets, December 31
—
—
Funded status at year end
$
(226) $
(271)
Mid Penn has capped the benefit to fut
f ur
t
e retirees under its post-retirement health benefit plan. Employees who had
achieved ten years of service as of January 1, 2008 and subsequently retire afte
f r at least 20 years of service are eligible for
f
reimbursement of majo
a r medical insurance premiums up t
u
o $5 thousand, if the employee has not yet reached age 65. Upon
becoming eligible for Medicare, Mid Penn will reimburse up to $5 thousand in premiums for
f
Medicare Advantage or a
similar supplemental coverage. The maximum reimbursement period will not exceed five years regardless of retirement age
and will end upon
u
the participant obtaining other employment or the participant’s death.
The amount recognized in other liabi
a lities on the Consolidated Balance Sheets at December 31, is as follows:
(In thousands)s
2024
2023
Accrue
r
d benefit
f
liabi
a lity
$
226
$
271
MID PENN BANCORP, INC.
119

The amounts recognized in accumulated other comprehensive income as of December 31 consist of:
(In thousands)s
2024
2023
Net (gain) loss, pretax
$
(65) $
(38)
Net prior service cost, pretax
—
—
The accumulated benefit
f
obligation for
f
health and life i
f
nsurance plans was $226 thousand and $271 thousand at
December 31, 2024 and 2023, respectively.
The components of net periodic postretirement benefit
f
(income) cost for 2024, 2023 and 2022 are as fol
f lows:
(In thousands)s
2024
2023
2022
Service cost
$
1
$
1
$
2
Interest cost
11
13
8
Amortization of prior service cost
—
10
(24)
Amortization of net (gain) / loss
(7)
(2)
2
Net periodic postretirement benefit
f
income
$
5
$
22
$
(12)
Assumptions used in the measurement of Mid Penn’s benefit
f
obligations at December 31 are as follows:
Weighted-average assumptions:
2024
2023
Discount rate
5.32 %
4.67 %
Rate of compensation increase
—
—
Assumptions used in the measurement of Mid Penn’s net periodic benefit
f
cost for the years ended December 31 are as
follows:
Weighted-average assumptions:
2024
2023
2022
Discount rate
4.67 %
4.90 %
2.40 %
Rate of compensation increase
—
—
—
Assumed health care cost trend rates at December 31 are as follows:
2024
2023
2022
Health care cost trend rate assumed for
f
next year
7.00%
7.00%
6.50%
Rate to which the cost trend rate is assumed to decline (the ultimate
trend rate)
5.50%
5.50%
5.50%
Year that the rate reaches the ultimate trend rate
2028
2027
2026
The fol
f lowing tabl
a e shows the estimated benefit
f
payments for fut
f ur
t
e periods:
(In thousands)s
2025
$
30
2026
28
2027
28
2028
25
2029
14
2030-2034
65
MID PENN BANCORP, INC.
120

Directors’
r
Retirement Plan - Mid Penn has an unfunde
f
d defin
f ed benefit retirement plan ("Director's Plan") for directors
with benefits based on years of service.
On October 1, 2023, the Bank decided to terminate the Plan and pay out any benefits
f
to participants in a lump sum cash
payout of $1.3 million, which was paid out on October 1, 2024.
The fol
f lowing tabl
a es provide a reconciliation of the changes in the Director's Plan benefit obligations and fai
f r value of plan
assets for the years ended December 31, 2024 and 2023, and a statement of the status
t
at December 31, 2024 and 2023. This
Plan is unfunde
f
d.
(In thousands)s
December 31,
Change in benefit obligations:
2024
2023
Benefit obligations, January 1
$
1,306
$
1,299
Service cost
—
56
Interest cost
—
61
Actuarial loss
—
—
Change in assumptions
—
(12)
Benefit payments
(1,306)
(98)
Benefit obligations, December 31
$
—
$
1,306
Change in fair value of plan assets:
Fair value of plan assets, January 1
$
—
$
—
Employer contributions
1,306
98
Benefit payments
(1,306)
(98)
Fair value of plan assets,
—
—
Funded status at year end
$
—
$
(1,306)
Amounts recognized in other liabilities on the Consolidated Balance Sheet at December 31 are as follows:
(In thousands)s
2024
2023
Accrue
r
d benefit
f
liabi
a lity
$
—
$
1,306
Amounts recognized in accumulated other comprehensive loss (income) as of December 31 consist of:
(I( n t
I
hous
t
ands)s
2024
2023
Net prior service cost, pretax
$
—
$
—
Net loss, pretax
—
214
The accumulated benefit
f
obligation for
f
the retirement plan was zero at December 31, 2024 and $1.3 million at
December 31, 2023.
The components of net periodic retirement cost for
f
2024, 2023 and 2022 are as fol
f lows:
(In thousands)s
2024
2023
2022
Service cost
$
—
$
56
$
75
Interest cost
—
61
30
Amortization of net loss
—
34
20
Net periodic retirement cost
$
—
$
151
$
125
MID PENN BANCORP, INC.
121

Assumptions used in the measurement of Mid Penn’s benefit
f
obligations at December 31 are as follows:
Weighted-average assumptions:
2024
2023
Discount rate
—%
4.80%
Change in consumer price index
—
3.40
Assumptions used in the measurement of Mid Penn’s net periodic benefit
f
cost for the years ended December 31 are as
follows:
Weighted-average assumptions:
2024
2023
2022
Discount rate
—%
4.80%
4.90%
Change in consumer price index
—
3.40
7.00
The Bank is the owner and beneficiary o
r
f insurance policies on the lives of certain offi
f cers and directors, which infor
f
mally
fund the retirement plan obligation. The aggregate cash surrender value of these policies was $4.3 million and $4.2 million
at December 31, 2024 and 2023, respectively.
Scottdal
d e Defin
f ed Benefit
e
Pension Plan
f
f
- As a result of the acquisition of Scottdale on January 8, 2018, Mid Penn has
assumed a noncontributory d
r
efin
f ed benefit pension plan ("Scottdale Plan") covering certain former employees of Scottdale.
Afte
f r the acquisition, Mid Penn does not allow for
f
any fur
f
ther participants to join the Plan. Mid Penn’s policy is to fund
f
pension benefit
f s as accrue
r
d. The Scottdale Plan’s assets are managed by the trust department of the Bank and were
primarily invested in corporate equity securities at the time of acquisition but have since been diversifie
f d into a more
conservative investment profile
f
, including fixed income debt securities. The investment objective of the plan is "Balanced"
to provide relatively stable growth from assets offs
f et by a moderate level of income with target portfol
f io allocations of up
to 20% cash, 30-50% fixed income securities, and 40-60% equity securities. The valuation of the plan’s assets is subj
u ect to
market fluctuations.
For the year ended December 31, 2024, Mid Penn recognized no settlement gains. For the year ended December 31, 2023,
Mid Penn recognized $322 thousand of settlement gains, as a result of certain lump sum payouts to participants of the
Scottdale Plan. The settlement gains were recorded in noninterest income as a component of other income in the
Consolidated Statements of Income for the year ended December 31, 2023.
MID PENN BANCORP, INC.
122

The fol
f lowing tabl
a es provide a reconciliation of the changes in the Scottdale Plan’s benefit
f
obligations and fai
f r value of
plan assets for the year ended December 31, 2024 and 2023, and a statement of the status
t
at December 31, 2024 and 2023:
thousands)s
December 31,
Change in benefit obligations:
2024
2023
Benefit obligations, January 1
$
2,659
$
3,805
Service cost
25
58
Interest cost
130
197
Settlement (gain) loss
—
(4)
Actuarial (gain) / loss
(97)
168
Settlement payments
—
(1,472)
Benefit payments
(170)
(93)
Benefit obligations, December 31
$
2,547
$
2,659
Change in fair value of plan assets:
Fair value of plan assets, January 1
$
3,468
$
4,722
Return on plan assets
328
348
Employer contributions
—
—
Benefit payments
(170)
(93)
Administrative expenses
(29)
(37)
Settlement payments
—
(1,472)
Fair value of plan assets, December 31
3,597
3,468
Funded status at year end
$
1,050
$
809
Amounts recognized on the Consolidated Balance Sheets at December 31 are as follows:
(In thousands)s
2024
2023
Accrue
r
d pension benefit asset
$
1,050
$
809
Amounts recognized in accumulated other comprehensive loss consist of the following as of December 31:
(In thousands)s
2024
2023
Unrecognized actua
t
rial gain
$
798
$
581
The accumulated benefit
f
obligation for
f
the retirement plan was $2.5 million and $2.7 million at December 31, 2024 and
2023, respectively.
The components of net periodic retirement cost for
f
December 31 are as fol
f lows:
(In thousands)s
2024
2023
Service cost
$
25
$
58
Interest cost
130
197
Expected return on plan assets
153
211
Recognized net actuarial gain
(25)
(63)
Net periodic retirement income
$
(23) $
(19)
MID PENN BANCORP, INC.
123

Assumptions used in the measurement of Mid Penn’s benefit
f
obligations and net periodic pension costs at December 31 are
as follows:
Weighted-average assumptions:
2024
2023
Discount rate
5.50%
5.00%
Expected long-term return on plan assets
4.50
4.50
Rate of compensation increases
2.50
2.50
The fol
f lowing tabl
a e presents a summary of the Scottdale Plan’s assets at fair value and the weighted-average asset
allocations by investment category a
r
s of December 31:
Estimated Fair
Value
Percentage of
Total Assets
Estimated Fair
Value
Percentage of
Total Assets
(Dollars in thousands)s
2024
2023
Cash and cash equivalents
$
263
7.3 % $
90
2.6 %
Common stock
2,081
57.9
2,186
63.0
Corporate bonds
1,253
34.8
1,192
34.4
$
3,597
100.0 % $
3,468
100.0 %
The description of the valuation methodologies used for assets measured at fair value is disclosed below.
Common Stocks
Valued at the closing price reported on the active market on which the individual securities are traded and therefore would
be categorized as Level 1 assets under the fair value hierarchy.
Corporate Bonds
Valued using matrix pricing, which is a mathematical technique used widely in the industry t
r
o 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 and therefore would be categorized as Level 2 assets under the fair value hierarchy.
The methods described above
a
may produce a fair value calculation that may not be indicative of net realizable value or
reflective of fut
f ur
t
e fai
f r values. Furthermore, while the Plan believes its valuation methods are appr
a
opriate and consistent
with other market participants, the use of different methodologies or assumptions to determine the fair value of certain
financial instrum
r
ents could result in a different fair value measurement at the reporting date.
The fol
f lowing tabl
a e shows the estimated benefit
f
payments for fut
f ur
t
e periods.
(In thousands)s
2025
$
139
2026
137
2027
168
2028
196
2029
194
2030-2034
1,038
Riverview Defin
e
ed Benefi
e t Plan
f
f
- As a result of the Riverview Acquisition on November 30, 2021, Mid Penn has assumed
noncontributory d
r
efin
f ed benefit pension plans ("Riverview Plans") covering certain former employees of Riverview (or its
predecessor-in-interest) as fol
f lows:
Pursuant to the consolidation with Union Bancorp, Inc. ("Union") effective November 1, 2013, Riverview assumed
Union’s noncontributory d
r
efin
f ed benefit pension plan, which subs
u
tantially covered all Union employees. The plan
MID PENN BANCORP, INC.
124

benefits were based on average salary and years of service. Union elected to freeze all benefits
f
earned under the plan
effe
f ctive January 1, 2007.
Riverview also assumed responsibility of Citizens National Bank of Meyersdale’s ("Citizens") noncontributory
r
defined benefit
f
pension plan effect
f
ive as of the December 31, 2015 merger date. The plan subs
u
tantially covered all
Citizens employees, and the plan benefits
f
were based on average salary and years of service. Citizens elected to freeze
all benefit
f s earned under the plan effe
f ctive January 1, 2013.
As a result of a merger effe
f ctive October 1, 2017, Riverview assumed responsibility of CBT Financial Corp’
r
s ("CBT")
postretirement benefit
f s plan, which is an unfunde
f
d postretirement benefit
f
plan covering health insurance costs and
post-retirement life i
f
nsurance benefits for certain retirees.
Subs
u
equent to the Riverview Acquisition, Mid Penn disallowed any further participants to join the Riverview Plans. Mid
Penn’s policy is to fund
f
pension and post-retirement benefits as accrue
r
d. The Riverview Plans’ assets are managed by a
third party and were primarily invested in a combination of cash and cash equivalents, equity securities and fixed income
securities at the time of acquisition. The valuation of the Riverview Plans’ assets is subj
u ect to market fluctuations.
The fol
f lowing tabl
a es provide a reconciliation of the changes in the Riverview Plans' benefit
f
obligations and fai
f r value of
plan assets for year ended December 31, 2024, and a statement of the status
t
at December 31, 2024 and 2023.
(In thousands)s
Change in benefit obligations:
2024
2023
Benefit obligations, January 1
$
6,442
$
6,424
Interest cost
299
309
Actuarial (Loss)/gain
(483)
228
Benefit payments
(518)
(519)
Benefit obligations, December 31
$
5,740
$
6,442
Change in fair value of plan assets:
Fair value of plan assets, January 1,
$
6,895
$
6,720
Return on plan assets
329
691
Contributions
3
3
Benefit payments
(516)
(519)
Fair value of plan assets, December 31
6,711
6,895
Funded status at year end
$
971
$
453
Amounts recognized in other liabilities on the Consolidated Balance Sheets as of December 31 are as follows:
(In thousands)s
2024
2023
Accrue
r
d pension benefit asset
$
971
$
453
As of December 31, 2024 amounts related to the Riverview Plans that have been recognized in accumulated other
comprehensive loss but not yet recognized as a component of net periodic pension cost are as fol
f lows:
(In thousands)s
2024
2023
Unrecognized actua
t
rial gain
$
415
$
76
MID PENN BANCORP, INC.
125

The components of net periodic pension and postretirement benefit
f
cost for the year ended December 31, 2024 and 2023
are as fol
f lows:
(In thousands)s
2024
2023
Interest cost
$
299
$
309
Expected return on plan assets
(397)
(387)
Amortization of net loss
12
—
Net periodic pension benefit
$
(86) $
(78)
(In thousands)s
2024
2023
Service credit
$
—
$
—
Interest cost
1
1
Unrecognized gain
(1)
(1)
Net periodic postretirement benefit
f
$
—
$
—
The accumulated benefit
f
obligation was $5.7 million and $6.4 million at December 31, 2024 and 2023, respectively, for
f
the
Riverview Plans.
Weighted average assumptions used in the measurement of Mid Penn’s benefit
f
obligations and net periodic pension costs
at December 31, 2024 and 2023 are as fol
f lows:
Pension Benefit
f s
Postretirement
Life Insurance
Benefits
2024
Union
Citizens
CBT
Discount rate
4.83 %
4.83 %
5.32 %
Expected long-term return on plan assets
6.00
6.00
n/a
2023
Discount rate
5.02 %
5.02 %
4.70 %
Expected long-term return on plan assets
6.00
6.00
n/a
The fol
f lowing summarizes the actua
t
rial assumptions used for the Riverview Plans:
For the pension plan, the selected long-term rate of return on plan assets was primarily based on the asset allocation of the
plan’s assets. Analysis of the historic returns on these asset classes and projections of expected future returns were
considered in setting the long-term rate of return.
The benefit
f
offe
f red under the postretirement benefit
f s plan is fix
f ed; therefore, the accumulated postretirement benefit
f
obligation is not impacted by health care cost trends or the rate of compensation increase.
MID PENN BANCORP, INC.
126

The fol
f lowing tabl
a e presents a summary of the Riverview Plan’s assets at fair value and the weighted-average asset
allocations by investment category a
r
s of December 31:
Estimated Fair
Value
Percentage of
Total Assets
Estimated Fair
Value
Percentage of
Total Assets
Weighted-average asset allocations:
2024
2023
Cash and cash equivalents
$
60
0.9 % $
48
0.7 %
Mutual fund - equity
2,619
39.0
2,499
36.2
Mutual fund / EFTs - fixed income
3,716
55.4
4,038
58.6
Common / collective trus
r
ts equity
316
4.7
310
4.5
$
6,711
100 % $
6,895
100 %
The valuation used is based on quoted market prices provided by an independent third party. The fair values of mutual fund
investments are considered Level 1 assess in the fai
f r value hierarchy and the collective trusts equity are considered Level 2
assets.
The fol
f lowing tabl
a e shows the estimated benefit
f
payments for fut
f ur
t
e periods.
(In thousands)s
Pension
Benefits
Postretirement
Life Insurance
Benefits
2025
$
517
$
4
2026
506
3
2027
493
3
2028
493
3
2029
485
3
2030-2033
2,207
11
Note 15 - Other Benefit
f
Plans
Mid Penn maintains several benefit
f
plans for
f
both current and for
f
mer employees of the Corpor
r
ation. Liabilities related to
the plans are recorded in other liabi
a lities on the balance sheet, and aggregate cash surrender values assets related to the lifef
insurance plans are recorded in the cash surrender value of life insurance line item on the balance sheet. Significant aspects
of the plans are detailed below.
Defin
e
ed-C
d
ont
C
ri
t bution 401(k)
(
Plan
f
( )
(
- The Bank has a 401(k) plan that covers subs
u
tantially all employees. The plan allows
employees to contribute a portion of their salaries and wages to the plan and provides for
f
Mid Penn to match a portion of
employee-elected salary deferrals, subject to certain percentage maximums of their salaries and wages. The Corpor
r
ation’s
contribution to the 401(k) Plan was $1.8 million, $1.7 million, and $1.4 million for the years ending December 31, 2024,
2023, and 2022, respectively and is included as a component of salaries and benefits
f
expense in the Consolidated
Statements of Income. The plan also includes a funded contributory p
r
rofit sharing provision for substantially all employees
which is fun
f
ded annually when appl
a
icable. The Corporation did not make a profit sharing contribution to the plan in 2024,
2023, or 2022.
Defe
e rred Com
C
pe
m
nsation Plan
f
p
- Mid Penn has a directors’ defer
f red compensation plan, which allows directors to defer
f
receipt of director fees for a specifie
f d period in order to provide future retirement income. At December 31, 2024 and 2023,
the Corpor
r
ation accrued a liabi
a lity of $2.6 million and $2.4 million, respectively, for this plan. The expense related to the
plan was $159 thousand, $127 thousand and $64 thousand in 2024, 2023 and 2022, respectively, and is included as a
component of other expense in the Consolidated Statements of Income.
Supplemental Exec
E
utive Retirement Plan
pp
- On September 6, 2022, Mid Penn entered into new or amended and restated
suppl
u
emental executive retirement plan agreements ("SERPs") with six named executive offi
f cers and three other members
of the Bank’s executive management team. Each SERP provides for
f
the monthly payment of a fix
f ed cash benefit over a
MID PENN BANCORP, INC.
127

period of 15 years, commencing on the fir
f st day of the month fol
f lowing the Executive’s separation fro
f
m service: (i)
occurring on or afte
f r reaching normal retirement age (age 70); (ii) due
d
to disabi
a lity; (iii) due to death; or (iv) within two
years fol
f lowing a change in control of the Bank. The annual benefit
f
vests over a term of four to ten years, with a portion of
the annual benefit
f
having previously vested for several of the participants. Any unvested portion of the benefit ful
f ly vests
upon a change in control of the Bank. The accrue
r
d liabi
a lity for
f
the supplemental retirement plans was $3.2 million and $2.5
million at December 31, 2024 and 2023, respectively. The expense related to the plan was $739 thousand, $792 thousand
and $609 thousand in 2024, 2023 and 2022, respectively and is included as a component of salaries and benefit
f s expense in
the Consolidated Statements of Income.
Split Dollar Life Insurance Arrangementst
p
f
g
- At December 31, 2024 and 2023, the Bank had Split Dollar Life I
f
nsurance
arrangements with two former executives for which the aggregate collateral assignment and cash surrender values are
approximately $1.4 million for December 31, 2024 and 2023. Mid Penn acquired Phoenix’s Split Dollar Life Insurance
arrangements in 2015 on select employees, which had aggregate cash surrender values of $4.5 million and $4.4 million at
December 31, 2024 and 2023. Mid Penn acquired First Priority’s Split Dollar Life Insurance arrangements in 2018 on
select employees, which had aggregate cash surrender values of $3.8 million and $3.7 million at December 31, 2024 and
2023. Mid Penn acquired Riverview’s Split Dollar Life Insurance arrangements in 2021 on select employees, which had
aggregate cash surrender values of $1.4 million and $2.0 million at December 31, 2024 and 2023.
Rabbi Trust - As a res lult of the acq iui isi ition of River iview, Midid Penn assumed certain bene ifit pla
l
n liabibi
a li i
lities related to
compensa ition arra g
ngements withihin o hther liliabibi
a lilities on the Cons lolididat d
ed Balance Sheets, in lcl di
udi g
ng certain execu itive non-
qualif
lifie
f d retiremen
b
t benefit
f s, deferred compensation plans, a d
nd execu itive employment a d
nd separa ition agreements
asso iciat d
ed
i
wi hth
i
Riverview.
The details of the compensation arrangements for
f
the years ended December 31 include:
(In thousands)s
Fully Funded Gross Amounts
Compensation Arrangements
2024
2023
Suppl
u
emental executive retirement agreements
$
1,112
$
1,214
Executive defer
f red compensation agreement
1,235
1,440
Total compensation agreements
$
2,347
$
2,654
The obligations are ful
f ly funded through a Rabbi Trus
r
t having a cash balance of $2.7 million and $2.9 million within other
assets on the Consolidated Balance Sheets as of December 31, 2024 and 2023 to provide a source of funds in satisfyi
f ng the
obligations under the respective compensation arrangements.
MID PENN BANCORP, INC.
128

Note 16 - Income Taxes
Significant components of the Corporation’s net deferred tax asset at December 31, 2024 and 2023 are shown below.
(In thousands)s
2024
2023
Deferred tax assets:
Allowance for
f
loan losses
$
7,878
$
7,642
Loan fees
769
1,053
Deferred compensation
1,317
1,476
Benefit plans
50
60
Unrealized loss on securities
5,389
4,992
Lease adjustments
87
74
Business combination adjustments
4,659
5,669
Acquired NOL, Section 1231, and charitabl
a e contribution carryforwards
3,153
3,832
Rabbi
a
Trus
r
t
521
593
Riverview AMT credits
621
696
Equity Comp
249
256
Riverview subordinated debt fai
f r value adju
d stment
139
327
Software renewal costs
222
335
Unfunded and loan basis adjustments
491
635
Investments in Flow-through entities
517
391
Other
482
378
26,544
28,409
Deferred tax liabi
a lities:
Depreciation
(1,160)
(1,397)
Bond accretion
(269)
(187)
Goodwill and intangibles
(505)
(1,017)
Prepaid expenses
(74)
(227)
Benefit plans
(1,368)
(1,199)
Interest Rate Swaps
(421)
(236)
(3,797)
(4,263)
Deferred tax asset, net
$
22,747
$
24,146
In assessing the Corpor
r
ation’s abi
a lity to realize defer
f red fed
f
eral tax assets, management considers whether it is more likely
than not some portion or all of the deferred tax assets will not be realized. The ultimate realization of defer
f red tax assets is
dependent upon the generation of fut
f ur
t
e taxable income during periods in which those temporary d
r
iffe
f rences become
deductible. Management considers the scheduled reversal of deferred tax liabi
a lities, projected future taxabl
a e income, and
prude
r
nt, feas
f
ible and permissible as well as availabl
a e tax planning strategies in making this assessment. At December 31,
2024, based on the level of historical taxable income and proje
o ctions for fut
f ur
t
e taxable income over the periods in which
the defer
f red tax assets are deduc
d
tible, management believes it is more likely than not that Mid Penn will realize the benefits
of these defer
f red tax assets and has no valuation allowances recorded against any components of its deferred tax asset,
including the carryforward balances related to net operating losses ("NOL"), Section 1231 losses, and charitabl
a e
contribution carryforwards.
At December 31, 2024, Mid Penn had NOL carryforwards of $2.4 million resulting from the November 30, 2021
acquisition of Riverview. These NOLs were assumed by Riverview in a previous acquisition and were generated dur
d
ing the
tax years ended December 31, 2013, 2014, and 2015 and begin to expire in 2032. The Coronavirus Aid, Relief, and
Economic Security ("CARES") Act, signed into law on March 27, 2020 to mitigate the economic effe
f cts of COVID-19,
implemented a fiv
f e-year carryback period for NOLs generated in tax years beginning in 2018, 2019, or 2020. As a result of
this CARES Act provision, during the year ended December 31, 2023, Mid Penn fil
f ed the required fed
f
eral tax retur
t
ns to
MID PENN BANCORP, INC.
129

carryback NOLs to the 2017 tax year, comprised of (i) $1.2 million of NOLs generated in 2018 and acquired fro
f
m
Scottdale, and (ii) $1.2 million of NOLs generated in 2018 and acquired fro
f
m First Priority. The carryback of these NOLs
to the 2017 tax year when the tax rate was 34% (versus 21% in 2018) generated a federal tax benefit of $318 thousand
recorded in the provision for income taxes on the Consolidated Statements of Income for the year ended December 31,
2020. The remaining NOL balance of $119 thousand at December 31, 2021 was generated in the 2012 tax year, was
acquired fro
f
m First Priority, and expires in 2032. Mid Penn is limited to a deduc
d
tion of the lesser of the availabl
a e NOL
carryforward or 80% of pre-NOL taxabl
a e income in a single tax year as set for
f
th in the Tax Cuts and Jobs Act ("TCJA").
Mid Penn had no charitabl
a e contribution carryforwards at December 31, 2024 and December 31, 2023, while at
December 31, 2022, Mid Penn had $43 thousand charitabl
a e contribution carryforwards which were acquired fro
f
m
Riverview. During the years ended December 31, 2024, 2023 and 2022, Mid Penn generated sufficient taxable income to
utilize all charitabl
a e contribution carryforwards. Mid Penn expects to generate suffi
f cient taxable income to utilize all
charitabl
a e contribution carryforwards in the fut
f ur
t
e.
Acquired Section 1231 losses totaling $314 thousand were recorded as a result of filing the fin
f al First Priority return in
2019 and expired in 2022.
The annual usage of acquired NOL, charitabl
a e contribution carryforwards, and Section 1231 losses is limited by Internal
Revenue Service ("IRS") Section 382 regulations. These limitations are calculated separately for
f
each acquisition as the
federal long-term tax-exempt rate at the date of acquisition multiplied by the valuation of the selling company as calculated
in accordance with GAAP. As a result, the usage of acquired NOLs, charitabl
a e contribution carryforwards, AMT
carryforwards, and Section 1231 losses to offset taxabl
a e income related to the Riverview Acquisition is limited to $2.0
million per year and $1.9 million per year for
f
the First Priority Acquisition. All contribution carryforwards related to the
Scottdale Acquisition were utilized as of December 31, 2022.
The provision for income taxes consists of the fol
f lowing:
(In thousands)s
2024
2023
2022
Current tax provision
Federal
$
7,118
$
7,570
$
10,212
State
864
1,033
67
Total current tax provision
$
7,982
$
8,603
$
10,279
Deferred tax expense (benefit)
Federal
$
1,998
$
(525) $
2,262
State
615
(781)
—
Total defer
f red tax expense (benefit)
2,613
(1,306)
2,262
Total provision for income taxes
$
10,595
$
7,297
$
12,541
A reconciliation of the federal income tax provision at the statutory rate of 21% for 2024, 2023 and 2022 to Mid Penn's
actua
t
l fed
f
eral income tax provision at its effe
f ctive rate is as fol
f lows:
(In thousands)s
2024
2023
2022
Provision at the expected statut
t ory r
r
ate
$
12,607
$
9,388
$
14,143
Low income housing partnership tax credits
(2,163)
(1,337)
(929)
Effe
f ct of tax-exempt income
(804)
(641)
(614)
Effe
f ct of investment in life insurance
(770)
(252)
(203)
Nondeductible merger and acquisition expense
48
207
60
State income taxes, net of federal tax benefit
1,169
199
53
Nondeductible interest
150
108
20
Other items
358
(375)
11
Provision for income taxes
$
10,595
$
7,297
$
12,541
MID PENN BANCORP, INC.
130

Mid Penn has no unrecognized tax benefits that, if recognized, would fav
f
orably affe
f ct the effective income tax rate in
future periods. Mid Penn does not expect the total amount of unrecognized tax benefits
f
to significantly increase or decrease
in the next twelve months.
No amounts for interest and penalties were recorded in income tax expense in the Consolidated Statement of Income for
f
the years ended December 31, 2024, 2023, or 2022. There were no amounts accrued for interest and penalties at
December 31, 2024 or 2023.
Mid Penn and its subsidiaries are subject to U.S. federal income tax and income tax for the states of Pennsylvania, New
Jersey, and Maryland. With limited exceptions, Mid Penn is no longer subject to examination by taxing authorities for
f
years befor
f
e 2017.
Note 17 - Regulatory Matters
g
y
The Corpor
r
ation and the Bank are subj
u ect to regulatory c
r
apital requirements administered by banking regulators. Failure to
meet minimum capi
a tal requirements can trigger certain mandatory, and possibly additional discretionary, actions by the
regulators that if, undertaken, could have a direct material effe
f ct on the Corpor
r
ation's fin
f ancial statements. Under capital
adequacy guidelines and the regulatory f
r
ra
f mework for prompt corrective action, the Bank must meet specific
f
capital
guidelines that involve quantitative measures of its assets, liabi
a lities, and certain off-b
f
alance sheet items as calculated under
regulatory a
r
ccount practices. The Bank's capital amounts and classification are also subj
u ect to qualitative judgments by the
regulators about
a
components, risk weightings, and other fac
f
tors.
As of December 31, 2024 and 2023, the Corpor
r
ation and the Bank met all capital adequacy requirements and the Bank was
considered "well-capi
a talized". However, future changes in regulations could increase capital requirements and may have an
adverse effect on capi
a tal resources.
Minimum regulatory c
r
apital requirements established by Basel III rul
r es require the Corpor
r
ation 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 buffe
f r" of 2.5% above the minimum risk-based capital requirements, which must
be maintained to avoid restrictions on capi
a tal distributions and certain discretionary bonuses; and
•
Comply with the definition of capi
a tal to improve the abi
a lity of regulatory c
r
apital instrum
r
ents to absorb losses.
The Basel III Rules use a standardized approach for risk weightings. The rules provide that the fai
f lure to maintain the
"capital conservation buffe
f r" results in restrictions on capi
a tal distributions and discretionary cash bonus payments to
executive officers. As a result, under the Basel III Rules, if the Bank fai
f ls to maintain the required minimum capital
conservation buffe
f r, the Corpor
r
ation will be subj
u ect to limits, and possibly prohibitions, on its ability to obtain capital
distributions from the Bank. If the Corpor
r
ation does not receive suffi
f cient cash dividends from the Bank, it may not have
sufficient funds
f
to pay dividends on its common stock, service its debt obligations or repurchase its common stock.
Certain restrictions exist regarding the abi
a lity of the Bank to transfer
f
funds to the Corpor
r
ation in the form of cash
dividends, loans, or advances. The amount of dividends that may be paid fro
f
m the Bank to the Corpor
r
ation in any calendar
year is limited to the Bank’s current year’s net profits, combined with the retained net profits
f
of the preceding two years.
For the year ended December 31, 2024, $39.5 million of undistributed earnings of the Bank, included in the consolidated
shareholders’ equity balance, was availabl
a e for
f
distribution to the Corporation as dividends without prior regulatory
r
approval, subj
u ect to regulatory c
r
apital requirements below.
MID PENN BANCORP, INC.
131

The fol
f lowing tabl
a es present the regulatory c
r
apital levels, leverage ratios, and risk-based capital ratios as of December 31:
Actual
Minimum for
f
Basel III Capital
Adequacy
To Be Well-Capitalized
Under Prompt
Corrective
Action Provisions
(Dollars in thousands)s
Amount
Ratio
Amount
Ratio
Amount
Ratio
Mid Penn Bancorp, Inc.
p,
2024
Tier 1 Capital (to Average Assets)
$
535,501
10.0%
$
214,621
4.0%
N/A
N/A
Common Equity Tier 1 Capital (to Risk
Weighted Assets)
535,501
11.9
313,979
7.0
N/A
N/A
Tier 1 Capital (to Risk Weighted Assets)
535,501
11.9
381,261
8.5
N/A
N/A
Total Capital (to Risk Weighted Assets)
618,971
13.8
470,969
10.5
N/A
N/A
Mid Penn Bank
2024
Tier 1 Capital (to Average Assets)
$
495,729
9.2%
$
214,461
4.0%
$
268,076
5.0%
Common Equity Tier 1 Capital (to Risk
Weighted Assets)
495,729
11.1
313,456
7.0
291,066
6.5
Tier 1 Capital (to Risk Weighted Assets)
495,729
11.1
380,625
8.5
358,235
8.0
Total Capital (to Risk Weighted Assets)
533,458
11.9
470,183
10.5
447,794
10.0
Mid Penn Bancorp, Inc.
p,
2023
Tier 1 Capital (to Average Assets)
$
427,353
8.3%
$
204,935
4.0%
N/A
N/A
Common Equity Tier 1 Capital (to Risk
Weighted Assets)
427,353
9.8
305,083
7.0
N/A
N/A
Tier 1 Capital (to Risk Weighted Assets)
427,353
9.8
370,458
8.5
N/A
N/A
Total Capital (to Risk Weighted Assets)
510,734
11.7
457,624
10.5
N/A
N/A
Mid Penn Bank
2023
Tier 1 Capital (to Average Assets)
$
458,077
8.9%
$
204,777
4.0%
$
255,971
5.0%
Common Equity Tier 1 Capital (to Risk
Weighted Assets)
458,077
10.5
304,788
7.0
283,018
6.5
Tier 1 Capital (to Risk Weighted Assets)
458,077
10.5
370,100
8.5
348,330
8.0
Total Capital (to Risk Weighted Assets)
495,104
11.4
457,182
10.5
$
435,412
10.0
Note 18 - Commitments and Contingencies
g
Mid Penn is a party to fin
f ancial 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
establ
a ished 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 suppor
u
t 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 $64.3 million and $62.2 million of standby letters of credit outstanding as of December 31,
2024 and December 31, 2023, respectively. Mid Penn does not anticipate any losses because of these transactions. The
MID PENN BANCORP, INC.
132

amount of the liabi
a lity as of December 31, 2024 and December 31, 2023 for payment under standby letters of credit issued
was not considered material.
Mid Penn adopted FASB ASC 326, effe
f ctive January 1, 2023, which requires Mid Penn to estimate expected credit losses
for OBS credit exposures which are not unconditionally cancellabl
a e. Mid Penn maintains a separate ACL on OBS credit
exposures, including unfunde
f
d loan commitments and letters of credit, which is included in other liabi
a lities on the
accompanying Consolidated Balance Sheets.
The ACL - OBS is adju
d sted as a provision for OBS commitments in noninterest expense. The estimate includes
consideration of the likelihood that funding will occur, an estimate of exposure at defau
f
lt that is derived from
f
utilization
rate assumptions using a non-modeled appr
a
oach, and PD and LGD estimates that are derived fro
f
m the same models and
approaches for Mid Penn's other loan portfol
f io segments described in "Note 4 - Loans and Allowance for
f
Credit Losses -
Loans" above, as these unfunde
f
d commitments share similar risk characteristics with these loan portfol
f io segments.
The ACL - OBS at December 31, 2024 was $2.9 million compared to $3.6 million at December 31, 2023. The benefit for
f
OBS for
f
the year ended December 31, 2024 was $628 thousand. On January 1, 2023 in conjunction with adopting ASC
326, Mid Penn recorded an additional $3.1 million of provision for OBS which was included in the adoption cumulative
effe
f ct adju
d stment.
The fol
f lowing tabl
a e presents the activity in the ACL - OBS by segment for
f
the year ended December 31, 2024 and
December 31, 2023:
(in thousands)s
Balance at
December 31, 2023
(Benefit
f )/Provision
for credit loss
Year ended
December 31, 2024
1-4 Family Rental
$
11
$
5
$
16
C&I
1,270
(105)
1,165
CRE NonOwner Occupi
u ed
113
19
132
CRE Owner Occupi
u ed
106
(8)
98
Consumer
3
—
3
Farmland
108
(16)
92
HELOC & Junior Liens
100
(8)
92
Multifamily
24
3
27
Other Construc
r
tion & Land
1,036
(244)
792
Residential Construc
r
tion
778
(262)
516
Residential First Liens
18
(12)
6
$
3,567
$
(628) $
2,939
MID PENN BANCORP, INC.
133

(in thousands)s
Balance at
December 31, 2022
Provision for credit
loss
Year ended
December 31, 2023
1-4 Family Rental
$
—
$
11
$
11
C&I
33
1,237
1,270
CRE NonOwner Occupi
u ed
2
111
113
CRE Owner Occupi
u ed
4
102
106
Consumer
1
2
3
Farmland
2
106
108
HELOC & Junior Liens
13
87
100
Multifamily
—
24
24
Other Construc
r
tion & Land
23
1,013
1,036
Residential Construc
r
tion
6
772
778
Residential First Liens
1
17
18
$
85
$
3,482
$
3,567
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 liabi
a lity 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 liabi
a lities and contingencies in connection with such matters. For those matters where it is
probabl
a e that Mid Penn will incur losses and the amounts of the losses can be reasonabl
a y estimated, Mid Penn records an
expense and corresponding liabi
a lity in its consolidated financial statements. To the extent such matters could result in
exposure in excess of that liabi
a lity, the amount of such excess is not currently estimabl
a e. The range of losses for
f
matters
where an exposure is not currently estimabl
a e or considered probable is not believed to be material in the aggregate. This is
based on infor
f
mation currently availabl
a e 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 fut
f ur
t
e period.
MID PENN BANCORP, INC.
134

Note 19 - Earnings Per Share
g
The fol
f lowing tabl
a e presents the computation of basic and diluted EPS:
(In thousands, excep
e
t per share dat
d a)
2024
2023
2022
Net income
$
49,437
$
37,397
$
54,806
Weighted average shares outstanding (basic)
17,026,240
16,319,006
15,912,877
Effe
f ct of dilutive unvested restricted stock grants
44,622
31,957
21,758
Weighted average shares outstanding (diluted)
17,070,862
16,350,963
15,934,635
Basic earnings per common share
$
2.90
$
2.29
$
3.44
Diluted earnings per common share
2.90
2.29
3.44
There were no antidilutive shares at December 31, 2024, 2023, and 2022.
As previously announced on a Form 8-K on November 4, 2024, Mid Penn completed an underwritten public offe
f ring of
2,375,000 shares of common stock at a price of $29.50 per share, with the aggregate gross proceeds of the offering totaling
$70 million befor
f
e underwriting discounts and offe
f ring expenses. The net proceeds of the offe
f ring afte
f r deduc
d
ting the
underwriting discount and other offe
f ring expenses were $67 million.
Additionally, as previously announced on the Form 8-K on November 4, 2024, Mid Penn pursuant to an option granted to
the underwriting sold an additional 356,250 shares of the Company's common stock, in ful
f l, at the public offe
f ring price less
underwriting discounts and commissions, or $28.025 per share. The issuance was completed on November 5, 2024.
MID PENN BANCORP, INC.
135

Note 20 - Shareholders' Equity
q
y
Accumulated Other Comprehensive Loss (In
(
come)e
The components of accumulated other comprehensive loss (income), net of taxes, are as follows:
(In thousands)
Unrealized Loss on
Securities
Unrealized
Holding Losses on
Interest Rate
Derivatives used in
Defined Benefit
f
Plans
Total
Balance at December 31, 2021
$
(255) $
—
$
413
$
158
OCI befor
f
e reclassifications
(19,072)
—
(294)
(19,366)
Amounts reclassified from AOCI
—
—
(8)
(8)
Balance - December 31, 2022
(19,327)
—
111
(19,216)
OCI befor
f
e reclassifications
1,988
820
(212)
2,596
Amounts reclassified from AOCI
—
—
(17)
(17)
Balance - December 31, 2023
(17,339)
820
(118)
(16,637)
OCI befor
f
e reclassifications
(1,550)
665
723
(162)
Amounts reclassified from AOCI
—
—
(26)
(26)
Balance - December 31, 2024
$
(18,889) $
1,485
$
579
$
(16,825)
Treasury Stoc
t
k Repurchase Pro
P
gr
o
am
Mid Penn adopted a treasury s
r
tock repurchase program ("Program") initially effe
f ctive March 19, 2020, and renewed
through April 24, 2025 by Mid Penn’s Board of Directors on April 24, 2024. The Program authorizes the repurchase of up
u
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 subj
u ect 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
u
a number of fac
f
tors, including liquidity, market conditions, the availabi
a lity of alternative investment
opportunities and other fac
f
tors Mid Penn deems appr
a
opriate. The Program does not obligate Mid Penn to repurchase any
shares.
Mid Penn repurchased 15,500 shares during 2024 at an average price per share of $20.81 under its share repurchase
program. As of December 31, 2024, Mid Penn had repurchased 440,722 shares of common stock at an average price of
$22.78 per share under the Program. The Program had $5.0 million remaining availabl
a e for
f
repurchase as of December 31,
2024.
Dividend Reinvestment Pla
P n
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 c
r
ash payments, within specified limits, to be used for
f
the
purchase of additional shares.
Note 21 - Stock-Based Compensation Plans
p
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
f
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
MID PENN BANCORP, INC.
136

Stock Plan. The aggregate number of shares of common stock of the Company availabl
a e for
f
issuance under the Plan is
350,000 shares.
As of December 31, 2024, a total of 263,974 restricted shares were granted under the 2014 Restricted Stock Plan, of which
82,278 shares were unvested. The 2014 Restricted Stock Plan shares granted and vested resulted in $1.1 million in share-
based compensation expense for
f
the years ended December 31, 2024 and 2023, respectively.
Share-based compensation expense relating to restricted stock is calculated using grant date fai
f r 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 o
r
f the grant date over the vesting period and the expense is a component of salaries
and benefits
f
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
f
years. Restricted shares granted to
directors have a twelve-month vesting period, and the expense is a component of directors’ fees and benefit
f s within the
other expense line item on the Consolidated Statement of Income.
The fol
f lowing tabl
a e presents compensation expense and related tax benefits for restricted stock awards recognized on the
Consolidated Statements of Income:
(In thousands)s
2024
2023
2022
Compensation expense
$
1,047
$
1,103
$
1,142
Tax benefit
f
(220)
(232)
(240)
Net income effect
$
827
$
871
$
902
The fol
f lowing tabl
a e presents infor
f
mation regarding the non-vested restricted stock for
f
the year ended December 31, 2024:
Shares
Weighted-
Average
Grant Date
Fair Value
Non-vested at January 1, 2024
88,269
$
26.07
Vested
(41,101)
25.50
Forfeited
(5,950)
20.59
Granted
41,060
20.05
Non-vested at December 31, 2024
82,278
23.75
At December 31, 2024, there was $1.9 million of unrecognized compensation cost related to all non-vested share-based
compensation awards, which will be recognized as compensation expense through April 2028 with a weighted average
recognition period of 2.5 years. Mid Penn recognizes the impact of for
f
feitur
t
es as of the for
f
feitur
t
e date.
MID PENN BANCORP, INC.
137

Note 22 - Segment Repor
g
p
ting
Mid Penn operates as a single reportabl
a e segment, providing a broad range of banking and fin
f ancial services to individuals,
businesses, and institutional clients. These services include commercial and consumer lending, deposit products, wealth
management, insurance, and treasury m
r
anagement solutions. The Chief Executive Officer and the Chief Financial Offi
f cer
are the Mid Penn Chief Operating Decision Makers ("CODM"). The CODM regularly evaluates fin
f ancial performance and
allocates resources on a consolidated basis.
The fol
f lowing tabl
a e presents certain information reviewed by management:
(in thousands)s
December 31, 2024
December 31, 2023
December 31, 2022
Net interest income
$
156,671
$
146,973
$
147,833
Provision for credit losses
1,516
3,699
4,300
Noninterest income
22,493
20,008
23,657
Noninterest expense
117,616
118,588
99,843
Income taxes
10,595
7,297
12,541
Net income
49,437
37,397
54,806
Total assets
5,470,936
5,290,792
4,497,954
Other Segment Information
g
Revenue Composition: Mid Penn generates revenue primarily fro
f
m net interest income and non-interest income, including
fees from deposit accounts, wealth management, insurance, and treasury s
r
ervices.
Capi
a tal Allocation & Performance Metrics: The CODM assesses performance based on key financial metrics, including net
interest margin, retur
t
n on assets ("ROA"), return on equity ("ROE") and effi
f ciency ratio.
MID PENN BANCORP, INC.
138

Note 23 - Variable Interest Entities
Mid Penn invests in Low-Income Housing Tax Credit ("LIHTC") partnerships that are considered variable interest entities
("VIEs") under ASC 810, Consolidation. These partnerships are formed to develop and operate affo
f
rdable housing proje
o cts
that qualify f
f
or
f
federal tax credits under Section 42 of the Internal Revenue Code.
The Company evaluates its LIHTC investments to determine whether it has a controlling fin
f ancial interest in the
partnerships. A controlling fin
f ancial interest exists if the Company:
•
Has the power to direct activities that most significantly impact the entity's economic performance; and
•
Has the obligation to abs
a
orb l
r
osses or the right to receive benefits that could be significant.
Based on this assessment, Mid Penn has determined that it is not the primary beneficiary o
r
f the LIHTC partnerships, as it
does not control the significant operating decisions. Therefore, these entities are not consolidated in the fin
f ancial
statements.
Mid Penn accounts for
f
its LIHTC investments using the proportional amortization method under ASC 323-740,
Investments - Equity method and Joint Ventur
t
es: Investments in Qualifie
f d Affordable Housing Proje
o cts.
Under this
method:
•
The initial investment is recorded as an asset with Other Assets on the balance sheet.
•
Tax credits and other tax benefit
f s are recognized as a reduction of income tax expense.
•
The investment is amortized over the period in which the tax credits are received, with amortization recorded
as a component of income tax expense.
The investments in these unconsolidated entities are refle
f cted in other assets on the Consolidated Balance Sheet, and are
summarized for the periods below:
For the Year Ended
(in thousands)s
December 31, 2024
December 31, 2023
Income tax benefit
f s
$
2,163
$
1,337
Amortization of LIHTC investments
2,290
1,625
LIHTC investments are periodically assessed for
f
impairment. No impairment losses were recognized for the years ended
December 31, 2024 and 2023.
In addition, Mid Penn holds private equity investments classified as variable interest entities, with a total carrying value of
$2.8 million and $2.5 million as of December 31, 2024 and 2023. respectively. Mid Penn’s maximum exposure to loss is
limited to the carrying value of its investment.
MID PENN BANCORP, INC.
139

Note 24 - Parent Company Statements
p
y
CONDENSED BALANCE SHEETS
December 31,
(In t
I
hous
t
ands)s
2024
2023
ASSETS
Cash and cash equivalents
$
83,209
$
10,064
Investment in subs
u
idiaries
617,476
575,971
Other assets
1,423
4,252
Total assets
$
702,108
$
590,287
LIABILITIES AND
A
SHAREHOLDERS' EQUITY
Subor
u
dinated debt and trus
r
t preferred securities
$
45,741
$
46,354
Other liabi
a lities
1,349
1,583
Shareholders' equity
655,018
542,350
Total liabi
a lities and shareholders' equity
$
702,108
$
590,287
CONDENSED STATEMENTS OF INCOME
Years Ended December 31,
(In t
I
hous
t
ands)s
2024
2023
2022
Income
Other income
$
62
$
147
$
1,130
Total Income
62
147
1,130
Expenses
6,677
10,865
7,333
(Loss) income before income tax and equity in undistributed
earnings of subs
u
idiaries
(6,615)
(10,718)
(6,203)
Income Tax Benefit
f
1,549
2,932
702
Equity in undistributed earnings of subs
u
idiaries
54,503
45,183
60,307
Net Income
$
49,437
$
37,397
$
54,806
MID PENN BANCORP, INC.
140

CONDENSED STATEMENTS OF CASH FLOWS
Years Ended December 31,
(In t
I
hous
t
ands)s
2024
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
$
49,437
$
37,397
$
54,806
Equity in undistributed earnings of subs
u
idiaries
(54,503)
(45,183)
(60,307)
Stock based compensation
1,047
1,103
1,142
Amortization of debt issuance costs
7
7
26
Net change in other assets
2,829
(3,407)
759
Net change in other liabilities
(854)
(246)
(6,285)
Net cash (used in) provided by operating activities
(2,037)
(10,329)
(9,859)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash paid for
f
acquisition
—
(25,574)
—
Investment in subs
u
idiary
12,810
71,493
(1,787)
Net cash provided by (used in) investing activities
12,810
45,919
(1,787)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid
(13,822)
(12,981)
(12,735)
Employee and Director Stock Purchase Plans stock issuance
561
482
364
Proceeds fro
f
m issuance of common stock
75,956
—
—
Treasury s
r
tock purchased
(323)
(4,876)
(2,957)
Riverview restricted stock (1)
—
—
776
Subor
u
dinated debt and trus
r
t preferred securities redemption
—
(10,000)
(16,778)
Net cash (used in) provided by fin
f ancing activities
62,372
(27,375)
(31,330)
Net increase (decrease) in cash and cash equivalents
73,145
8,215
(42,976)
Cash and cash equivalents, beginning of year
10,064
1,849
44,825
Cash and cash equivalents, end of year
$
83,209
$
10,064
$
1,849
(1) Additionally, 2,500 shares of restricted stock were paid out in cash resulting in $776 thousand of cash consideration relating to
stock awards.
MID PENN BANCORP, INC.
141

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Mid Penn carried out an evaluation, under the supe
u
rvision and with the participation of its management, including the Chief
Executive Offic
f er and Chief Financial Officer, of the effec
f
tiveness of the design and operation of our disclosure controls
and procedur
d
es pursuant to Exchange Act Rul
R e 13a-15 as of December 31, 2024. Based upon
u
that evaluation, the Chief
Executive Officer and Chief Financial Offi
f cer concluded, as of December 31, 2024, that Mid Penn’s disclosure controls
and procedur
d
es were effe
f ctive in recording, processing, summarizing, and reporting infor
f
mation required to be disclosed by
Mid Penn within the time periods specified in the SEC’s rules and forms, and such infor
f
mation is accumulated and
communicated to management to allow timely decisions regarding required disclosures. Management Report on Internal
Controls over Financial Reporting is located on page 60 of this report and is incorporated herein by reference.
Our independent registered public accounting fir
f m, RSM US LLP, also attested to, and reported on, the effectiveness of
Mid Penn’s internal control over fin
f ancial reporting as of December 31, 2024. RSM US LLP’s attestation report appe
a
ars in
Part II, Item 8, "Financial Statements and Supplemental Data."
Changes in Internal Controls over Financial Reporting
There were no changes in Mid Penn’s internal control over fin
f ancial reporting dur
d
ing the fourth quarter of 2024 that have
materially affe
f cted, or are reasonably likely to materially affect, Mid Penn’s internal control over fin
f ancial reporting.
Management's Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over fin
f ancial reporting as defin
f ed in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over fin
f ancial reporting is a process designed to
provide reasonabl
a e assurance regarding the reliabi
a lity of the preparation of fin
f ancial statements for external purpos
r
es in
accordance with U.S. generally accepted accounting principles.
Management's internal control over fin
f ancial reporting includes those policies and procedur
d
es that (1) pertain to the
maintenance of records that, in reasonabl
a e detail, accurately and fai
f rly refle
f ct the transactions and dispositions of the assets
of the Company; (2) provide reasonabl
a e assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. generally accepted accounting principles and that receipts and expenditures of
the Company are being made only in accordance with authorizations of management and directors of the Company; and (3)
provide reasonabl
a e assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
Company's assets that could have a material effec
f
t on the financial statements. Management recognizes that because of its
inherent limitations, internal control over fin
f ancial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness of fut
f ur
t
e periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedur
d
es may deteriorate.
ITEM 9B. OTHER INFORMATION
None
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not appl
a
icable.
PART III
MID PENN BANCORP, INC.
142

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORAT
R
E GOVERNANCE
,
The infor
f
mation required by this Item, relating to directors, executive officers, and control persons, is set forth under the
captions "Executive Offi
f cers", "Infor
f
mation Regarding Director Nominees and Continuing Directors", "Delinquent Section
16(a) Reports", "Audit Committee Report", and "Governance of the Corpor
r
ation" in Mid Penn’s defin
f itive proxy statement
to be used in connection with the 2025 Annual Meeting of Shareholders, which pages are incorporated herein by reference.
The Corpor
r
ation has adopted a Code of Ethics that applies to directors, offi
f cers and employees of the Corpor
r
ation and the
Bank. The Corpor
r
ation amended the Code of Ethics on January 26, 2022. A copy is posted under Governance Documents
in the Corpor
r
ate Infor
f
mation section under the Investors link on the Corporation’s website, www.midpe
d
nnbank.com. The
Corporation’s Code of Ethics may be viewed on the Mid Penn website at www.midpennbank.com or requested from the
Corporate Secretary by telephone at 1-866-642-7736.
ITEM 11. EXECUTIVE COMPENSATION
The infor
f
mation required by this Item, relating to executive compensation, is set for
f
th under the captions "Compensation
Discussion and Analysis", "Executive Compensation", "Potential Payments Upon Termination or Change In Control",
"Infor
f
mation
Regarding
Director
Nominees
and
Continuing
Directors",
"Compensation
Committee
Report",
"Compensation Committee Interlocks and Insider Participation", and "Pay Versus Performance" of Mid Penn’s defin
f itive
proxy statement to be used in connection with the 2025 Annual Meeting of Shareholders, which pages are incorporated
herein by reference. In acco d
rdance
i
wi hth Items 4
(
02( )
v) and 4
(
07( )e)(5) of R g
eg lulation S-K, the information set forth u d
nder the
cap itions “P y
ay versus Performance” and “Compensa ition Com i
mittee Report” in su h
ch pr
y
oxy statement will
ill be deem d
ed to be
furnished i
d in thihis Report a d
nd
i
willll not be deem d
ed to be incorporat d
ed by
by referenc i
e into a y
ny fifililing u d
nder the Secu iri ities Act or
hthe Excha g
nge Act as a result of furnishihi g
ng hth d
e dis lclosur i
e in thihis manner.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS
The infor
f
mation required by this Item, relating to benefic
f ial ownership of Mid Penn’s common stock, is set forth under the
caption "Beneficial Ownership of Mid Penn Bancorp’s Stock Held By Principal Shareholders and Management" of Mid
Penn’s defin
f itive proxy statement to be used in connection with the 2025 Annual Meeting of Shareholders, which pages are
incorporated herein by reference. All awards under the Mid Penn Bancorp, Inc. 2014 Restricted Stock Plan are in the for
f
m
of restricted stock. Accordingly, they were not included in calculating the weighted-average exercise price because the
shares of common stock will be issued for no consideration.
The fol
f lowing tabl
a e provides infor
f
mation related to equity compensation plans as of December 31, 2024:
Plan Category
Number of
Securities to
be Issued Upon
Exercise
of Outstanding
Options,
Warrants, and
Rights
Weighted-
average Exercise
Price of
Outstanding
Options, Warrants,
and
Rights
Number of Securities
Remaining for
f
Future
Issuance Under Equity
Compensation Plans
(excluding securities
refle
f cted in column (a))
(a)
(b)
(c)
Equity compensation plans approved by security holders
82,278
—
5,250
Equity compensation plans not approved by security holders
—
—
—
Total
82,278
—
5,250
ITEM
13.
CERTAIN
RELATIONSHIPS
AND
RELATED
TRANS
R
ACTIONS,
AND
DIRECTOR
,
INDEPENDENCE
The infor
f
mation required by this Item, relating to transactions with management and others, certain business relationships
and indebtedness of management, is set forth under the capt
a ions "Certain Relationships and Related Transactions" and
"Governance of the Corpor
r
ation" of Mid Penn’s defin
f itive proxy statement to be used in connection with the 2025 Annual
Meeting of Shareholders, which pages are incorporated herein by reference.
MID PENN BANCORP, INC.
143

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The infor
f
mation required by this Item, relating to the fees and services provided by Mid Penn’s principal accountant, is set
forth under the capt
a ion "Audit Committee Report" and "Proposal No. 5: Ratific
f ation of the Appointment of RSM US, LLP
as the Corpor
r
ation’s Independent Registered Publ
u ic Accounting Firm for
f
2025" of Mid Penn’s defin
f itive proxy statement
to be used in connection with the 2025 Annual Meeting of Shareholders, which pages are incorporated herein by reference.
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES
(a) Financial statements are incorpor
r
ated by reference in Part II, Item 8 hereof.
Reports of Independent Registered Publ
u ic Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Comprehensive Income
Consolidated Statements of Changes in Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
(b) The financial statement schedules, required by Regulation S-X, are omitted because the infor
f
mation is either not
applicable or is included elsewhere in the Consolidated Financial Statements.
(c) The following Exhibits are fil
f ed as part of this filing on Form 10-K, or incorporated by reference hereto:
2.1
Agreement and Plan of Merger, dated as of March 29, 2017, by and among Mid Penn Bancorp, Inc., Mid
g
g ,
,
, y
g
p,
,
Penn Bank, and The Scottdale Bank and Trus
r
t Company
,
p
y (Incorporated by reference to Exhibit 2.1 to
Registrant’s Current Report on Form 8-K filed on March 30, 2017.)
2.2
Agreement and Plan of Merger, dated as of January 16, 2018, by and between First Priority Financial Corp.
r
g
g ,
y
,
, y
y
p
and Mid Penn Bancorp,
r
Inc.
p,
(Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on
Form 8-K fil
f ed on January 16, 2018.)
2.3
Agreement and Plan of Merger, dated as of June 30, 2021, by and between Riverview Financial Corporation
g
g ,
,
, y
p
and Mid Penn Bancorp,
r
Inc.
p,
(Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on
Form 8-K fil
f ed on June 30, 2021.)
2.4
Agreement and Plan of Merger, dated as of December 20, 2022, by and between Bruns
r
wick Bancorp.
r
and
g
g ,
,
,
y
p
Mid Penn Bancorp, Inc.
p,
(Incorporated by reference to Exhibit 2.1 to Registrant’s Current Report on Form 8-
K fil
f ed on December 20, 2022.)
2.5
Agreement and Plan of Merger, dated as of October 31, 2024, by and between William Penn Bancorporation
g
g ,
,
, y
p
and Mid Penn Bancorp,
r
Inc.
p,
(Incorporated by reference to Exhibit 2.1 to Registrant's Current Report on
Form 8-K fil
f ed on November 1, 2024.)
3(i)
The Registrant’s amended Articles of Incorpo
r
ration.
g
p
(Incorporated by reference to Exhibit 3(i) to
Registrant’s Quarterly Report on Form 10-Q file
f
d for
f
the quarterly period ended March 31, 2023
,
).
3(ii)
The Registrant’s By-laws
g
y
(Incorporated by reference to Exhibit 3(ii) of the Registrant's Annual Report on
Form 10-K fil
f ed with the SEC on March 28, 2024.)
4.1
Description of Registrant’s Securities
p
g
(Incorporated by reference to Exhibit 4.1 to Registrant’s Registration
Statement on Form S-4 filed on January 17, 2025
y
,
.)
MID PENN BANCORP, INC.
144

10.1
The Registrant’s Dividend Reinvestment Plan, as amended and restated.
g
,
(Incorporated by reference to
Exhibit 99.1 of Registrant’s Registration Statement on Form S-3, file
f
d with the SEC on October 12, 2005.)
10.2
Mid Penn Bancorp, Inc. 2014 Restricted Stock Plan.
p,
(Incorporated by reference to Appendix A of
Registrant’s Definitive Proxy Statement on Schedul
d e 14A as filed with the SEC on March 27, 2014.)
10.3
Form of Mid Penn Bancorp, Inc. Restricted Stock Agreement.
p,
g
(Incorporated by reference to Exhibit 10.4 of
the Registrant’s Annual Report on Form 10-K fil
f ed with the SEC on March 12, 2018.)
10.4
Mid Penn Bancorp, Inc. Director Stock Purchase Plan
p,
(Incorporated by reference to Exhibit 99.1 of
Registrant’s Registration Statement on Form S-8, filed with the SEC on June 8, 2017.)
10.5
Amended and Restated Employment Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Rory
p y
g
g
p,
,
y
G. Ritrievi dated September 6, 2022
p
,
. (Incorporated by reference to Exhibit 10.1 to Registrant's Current
Report on Form 8-K filed with the SEC on September 9, 2022.)
10.6
Employment Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Scott Micklewright dated
p y
g
g
p,
,
g
September 6, 2022.
p
,
(Incorporated by reference to Exhibit 10.3 to Registrant's Current Report on Form 8-K
filed with the SEC on September 9, 2022.)
10.7
Employment Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Justin T. Webb dated
p y
g
g
p,
,
September 6, 2022.
p
,
(Incorporated by reference to Exhibit 10.4 to Registrant's Current Report on Form 8-K
filed with the SEC on September 9, 2022.)
10.8
Amended and Restated Change in Control Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and
g
g
g
p,
,
Rory G. Ritrievi dated September 6, 2022.
y
p
,
(Incorporated by reference to Exhibit 10.6 to Registrant's Current
Report on Form 8-K filed with the SEC on September 9, 2022.)
10.9
Amended and Restated Change in Control Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and
g
g
g
p,
,
Scott Micklewright dated September 6, 2022.
g
p
,
(Incorporated by reference to Exhibit 10.8 to Registrant's
Current Report on Form 8-K filed with the SEC on September 9, 2022.)
10.10
Amended and Restated Change in Control Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and
g
g
g
p,
,
Justin T. Webb dated September 6, 2022.
p
,
(Incorporated by reference to Exhibit 10.9 to Registrant's Current
Report on Form 8-K filed with the SEC on September 9, 2022.)
10.11
Amended and Restated Suppl
u
emental Executive Retirement Plan Agreement between Mid Penn Bank and
pp
g
Rory G. Ritrievi dated September 6, 2022.
y
p
,
(Incorporated by reference to Exhibit 10.11 to Registrant's
Current Report on Form 8-K filed with the SEC on September 9, 2022.)
10.12
Amended and Restated Suppl
u
emental Executive Retirement Plan Agreement between Mid Penn Bank and
pp
g
Scott Micklewright dated September 6, 2022.
g
p
,
(Incorporated by reference to Exhibit 10.13 to Registrant's
Current Report on Form 8-K filed with the SEC on September 9, 2022.)
10.13
Amended and Restated Suppl
u
emental Executive Retirement Plan Agreement between Mid Penn Bank and
pp
g
Justin T. Webb dated September 6, 2022.
p
,
(Incorporated by reference to Exhibit 10.14 to Registrant's Current
Report on Form 8-K filed with the SEC on September 9, 2022.)
10.14
Form of Director Deferred Fee Agreement
g
(Incorporated by reference to Exhibit 10.13 of the Registrant’s
Annual Report on Form 10-K fil
f ed with the SEC on March 15, 2021.)
10.15
Director Retirement Plan (Incorporated by reference to Exhibit 10.14 of the Registrant’s Annual Report on
Form 10-K fil
f ed with the SEC on March 15, 2021.)
10.16
Employee Stock Purchase Plan
p y
(Incorporated by reference to Exhibit 10.1 to the Registrant's Registration
Statement on Form S-8 filed with the SEC on May 25, 2023)
MID PENN BANCORP, INC.
145

10.17
2023 Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 to Registrant's Registration Statement
on Form S-8 file
f
d with the SEC on May 25, 2023)
10.18
Executive Annual Incentive Plan (Incorporated by reference to Exhibit 10.1 to Registrant's Current Report
on Form 8-K fil
f ed with the SEC on January 24, 2025.)
10.19
Employment Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Jordan D. Space dated
p y
g
g
p,
,
p
September 6, 2022
p
,
(Incorporated by reference to Exhibit 10.1 of the Registrant’s Quarterly Report on Form
10-Q fil
f ed for the quarterly period ended March 31, 2024.)
10.20
Change in Control Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Jordan D. Space dated
g
g
g
p,
,
p
September 18, 2023
p
,
(Incorporated by reference to Exhibit 10.2 of the Registrant’s Quarterly Report on Form
10-Q for
f
the quarterly period ended March 31, 2024.)
10.21
Suppl
u
emental Executive Retirement Plan Agreement between Mid Penn Bank and Jordan D. Space dated
pp
g
p
September 6, 2022
p
,
(Incorporated by reference to Exhibit 10.3 of the Registrant’s Quarterly Report on Form
10-Q for
f
the quarterly period ended March 31, 2024.)
10.22
Employment Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Joseph Paese dated September
p y
g
g
p,
,
p
p
6, 2022
,
. (Incorporated by reference to Exhibit 10.1 of the Registrant's Annual Report on Form 10-K file
f
d
with the SEC on March 16, 2023.)
10.23
Amended and Restated Change in Control Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and
g
g
g
p,
,
Joseph Paese dated September 6, 2022.
p
p
,
(Incorporated by reference to Exhibit 10.2 of the Registrant's Annual
Report on Form 10-K fil
f ed with the SEC on March 16, 2023.)
10.24
Amended and Restated Suppl
u
emental Executive Retirement Plan Agreement between Mid Penn Bank and
pp
g
Joseph Paese dated September 6, 2022.
p
p
,
(Incorporated by reference to Exhibit 10.3 of the Registrant's Annual
Report on Form 10-K fil
f ed with the SEC on March 16, 2023.)
19
Insider Trading Policy
g
y - fil
f ed herewith
21
Subs
u
idiaries of Registrant
g
- fil
f ed herewith.
23
Consent of Independent Registered Publ
u ic Accounting Firm
p
g
g
31.1
Rule 13a-14(a)/15d-14(a) Certific
f ation of the Principal Executive Offi
f cer.
( )
( )
p
31.2
Rule 13a-14(a)/15d-14(a) Certific
f ation of the Principal Financial Offi
f cer.
( )
( )
p
32
Principal Executive and Financial Offi
f cer’s §1350 Certific
f ations.
p
§
97.1
Clawback Policy. (Incorporated by reference to Exhibit 97.1 of the Registrant's Annual Report on Form 10-
K fil
f ed with the SEC on March 28, 2024.)
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document
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 Labe
a
l Linkbase Document
MID PENN BANCORP, INC.
146

101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (for
f
matted in inline XBRL and contained in Exhibit 101)
ITEM 16. FORM 10-K SUMMARY
None.
MID PENN BANCORP, INC.
147

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto dul
d y authorized.
MID PENN BANCORP, INC.
(Registrant)
By: /s/ Rory G. Ritrievi
Rory G. Ritrievi
Chair, President and
Chief Executive Officer
(Principal Executive Officer)
Date: March 13, 2025
By: /s/ Justin T. Webb
Justin T. Webb
Chief Financial Offi
f cer
(Principal Financial Officer)
Date: March 13, 2025
MID PENN BANCORP, INC.
148

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the fol
f lowing
persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: /s/ Rory G. Ritrievi
March 13, 2025
Rory G. Ritrievi
Chair, President, Chief Executive Offi
f cer and
Director (Principal Executive Officer)
By: /s/ Justin T. Webb
March 13, 2025
Justin T. Webb
Chief Financial Offi
f cer (Principal Financial Offi
f cer)
By: /s/ Robert A. Abel
March 13, 2025
Robert A. Abel, Director
By: /s/ Kimberly J. Brum
r
baugh
March 13, 2025
Kimberly J. Brum
r
baugh, Director
By: /s/ Matthew G. DeSoto
March 13, 2025
Matthew G. DeSoto, Director
By: /s/ Albert J. Evans
March 13, 2025
Albert J. Evans, Director
By: /s/ Joel L. Frank
March 13, 2025
Joel L. Frank, Director
By: /s/ Maureen M. Gathagan
March 13, 2025
Maureen M. Gathagan, Director
By: /s/ Brian A. Hudson, Sr.
March 13, 2025
Brian A. Hudson, Sr., Director
By: /s/ Bruc
r
e A. Kiefer
March 13, 2025
Bruc
r
e A. Kiefer, Director
By: /s/ Theodore W. Mowery
M
r
arch 13, 2025
Theodore W. Mowery,
r
Director
By: /s/ John E. Noone
March 13, 2025
John E. Noone, Director
By: /s/ William A. Specht, III
March 13, 2025
William A. Specht, Director
MID PENN BANCORP, INC.
149

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FINANCIAL
HIGHLIGHTS
 
STRENGTH. STABILITY. GROWTH.
In 2024, the Mid Penn team delivered one of the strongest performances in the history of the company, despite a difficult 
operating environment. We are proud of the following accomplishments and look forward to a successful year ahead.
Return on Average Assets (%)
0.91
0.77
2024
2023
Total Deposits 
4,346,236
4,689,927
2024
Return on Equity (%)
7.16
8.64
Total Loans
4,252,792
4,443,070
Net Interest Income
156,671
146,973
2024
2023
Effciency Ratio 
65.6%
71.0%
ORGANIC DEPOSIT
GROWTH: $343 MILLION
OR 7.91%
CASH DIVIDENDS PAID:
$0.80 PER SHARE
CAPITAL RAISE: $76.5
MILLION NET PROCEEDS
AFTER UNDERWRITING CHARGES
TANGIBLE BOOK
VALUE GROWTH: 9.0%
2023
2024
2023
2023
2024
2023
2024

EDUCATION AND
DEVELOPMENT
 
 
 
19 0
10, 5 0 0 + 
NUMBER OF TIMES
BUDGET CALCULATOR
WAS USED IN 2024
 
14
COMMUNITY PARTNER
SITES USING MPB
CLASSROOM
5 5
 SCHOOLS
SPONSORED
11, 0 0 0 +
NUMBER OF STUDENTS
USING MPB CLASSROOM
FINANCIAL LITERACY TOOLS
 
9 7 %
9 4 
456
5 8
61
IN-PERSON TRAINING 
EVENTS WITH OPTION 
TO STREAM
JOB SHADOWING
OPPORTUNITIES
OF ALL EMPLOYEES HAD
AN INDIVIDUALIZED 
DEVELOPMENT PLAN MEETING
EMPLOYEES COMPLETED A 
PROGRAM AND EARNED A 
CERTIFICATION
PERFORMANCE
COACHING SESSIONS
TEACHERS USING
MPB CLASSROOM AS
A LEARNING TOOL 
MID PENN UNIVERSITY
Mid Penn strengthened its commitment to financial literacy in 2024 by formally establishing MPB Classroom, a financial literacy program 
designed to equip students and community members with essential financial skills. Through online courses, digital tools, and in-person workshops,
MPB Classroom provides accessible, high-quality financial literacy to learners of all ages. Educators receive unlimited access to comprehensive
lesson plans, workbooks, and a dedicated hub to track student progress. The program also extends to the broader community, ensuring financial
literacy is available to anyone who needs it.
Mid Penn University had a landmark year in 2024, expanding employee training with new courses, leadership programs and professional 
development opportunities. The year also saw the launch of a skills-based performance process designed to strengthen employee development by 
defining role-specific competencies, setting individualized goals, and incorporating regular supervisor check-ins. Integrated with Mid Penn
University Learning, this process ensures employees receive targeted training tailored to their skills and long-term career goals.

 
COMMUNITY
IMPACT
$2.24
MILLION
TOTAL GIVING
2024 GIVING HIGHLIGHTS
We take pride in supporting the communities we serve, and in 2024, we reaffirmed that commitment. Through 
charitable donations, fundraising efforts, volunteer opportunities and partnerships with local organizations, we 
worked diligently to make meaningful  impacts in the communities where we live, work and play.   
$555,000
To help strengthen and rebuild the underserved neighborhoods 
across our footprint, Mid Penn donated $555,000 to 
Neighborhood Assistance Program (NAP) projects. Our 
donation supports programs that enhance economic stability and 
improve the quality of life for low-income residents.  
$868,000
Through Pennsylvania’s Educational Improvement Tax Credit 
Program (EITC), Mid Penn provided $868,000 in funding for 
scholarships and educational programs that increase access to 
essential learning resources for students and educators.
$2.24 Million
Mid Penn Bank contributed a total of $2.24 million to nonprofit 
organizations and community programs, providing financial support 
and gifts to 710 organizations across our footprint. 
$200,000
Through the Mid Penn Bank Celebrity Golf Classic, $200,000 was 
donated to Breast Cancer Charities including the PA Breast Cancer 
Coalition and the Basser Center for BRCA at Penn Medicine. These 
funds support research, advocacy, and programs that provide vital 
resources to individuals and families affected by breast cancer.
13,782 Volunteer Hours
Mid Penn Bank employees demonstrated their commitment to 
giving back by contributing 13,782 volunteer hours to support 
local nonprofit organizations and community initiatives.
$340,000
Over the last decade, Mid Penn Bank has partnered with Penn State 
Health Department of Urology to support men’s prostate health 
through the NoShaveNovember campaign. This year’s initiative 
raised $340,000, increasing our total contributions to $1.3 million.   

Board of Directors
RORY G. RITRIEVI
Chair, President, and Chief Executive Officer, 
Mid Penn Bancorp, Inc. and Mid Penn Bank
MATTHEW G. DESOTO
President and Chief Executive Officer, 
MITER Brands
BRIAN A. HUDSON, SR.
Former Executive Director and Chief Executive
Officer, Pennsylvania Housing Finance Agency
JOHN E. NOONE
Lead Independent Director,
Mid Penn Bancorp, Inc.,
President, Shamrock Investments, LLC
ALBERT J. EVANS
President, Fanelli, Evans & Patel, P.C.
BRUCE A. KIEFER
Former Manager/Chemist,
 The Hershey Company,
Managing Partner, Lawrence Keister & Co.
ROBERT A. ABEL
Principal, Brown Plus
JOEL L. FRANK
Chairman and Managing Partner,
Lamb McErlane PC
THEODORE W. MOWERY
Founding Partner, Gunn Mowery, LLC
KIMBERLY J. BRUMBAUGH
Founder and Managing Partner,
Brumbaugh Wealth Management, LLC
MAUREEN M. GATHAGAN
Partner, Bittersweet Management, LLC,
Member, Gathagan Investment Company, LP
WILLIAM A. SPECHT, III
President and Chief Executive Officer, 
Seal Glove Manufacturing, Inc. and Ark Safety

Executive Team
Chair, President, and Chief Executive Officer
JUSTIN T. WEBB
Chief Financial Officer
JOSEPH L. PAESE
Director of Trust and
Wealth Management
Officers
RORY G. RITRIEVI
Chair, President, and Chief Executive Officer
JUSTIN T. WEBB
Chief Financial Officer
SCOTT W. MICKLEWRIGHT
Chief Revenue Officer
JORDAN D. SPACE
Chief Operating Officer
HEATHER R. HALL
Chief Lending Officer
JOAN E. DICKINSON
Chief Retail Officer

OUR MISSION
TO REWARD ALL OF OUR SHAREHOLDERS, CRITICALLY SERVE AND SUPPORT ALL OF OUR
CUSTOMERS AND COMMUNITIES, AND CHERISH ALL OF OUR EMPLOYEES.
2407 Park Drive, Harrisburg, PA 17110
midpennbank.com