Mid Penn Bancorp, Inc.
Annual Report 2024

Plain-text annual report

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 v q y an,n,n, cial ion ans,s ing ng cial tive ve act, was gin. der wthth. allll 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 ev e e wh Pen Ban mill Sta and cau vo vol aro initi in 2 scsch us us used ed ed 10,50 50 500 tititime me mes wi wi withththininin the 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 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] 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

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