MPB 10-Q Quarterly Report March 31, 2024

MID PENN BANCORP INC

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mpb-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number 1-13677

MID PENN BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)


Pennsylvania						25-1666413
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification Number)
2407 Park Drive Harrisburg , Pennsylvania						17110
(Address of Principal Executive Offices)						(Zip Code)

Registrant’s telephone number, including area code 1.866 . 642.7736

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value per share

MPB

The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated Filer

Emerging Growth Company

Non-accelerated Filer

Smaller Reporting Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of May 1, 2024, the registrant had 16,689,304 shares of common stock outstanding, par value $1.00 per share.

Table of Contents

FORM 10-Q

TABLE OF CONTENTS


PART 1 – FINANCIAL INFORMATION

Item 1 – Financial Statements			4

Consolidated Balance Sheets as of March 31, 2024 and December 31, 202 3 (Unaudited)			4

Consolidated Statements of Income for the Three Months Ended March 31 , 202 4 and 202 3 (Unaudited)			5

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31 , 202 4 and 202 3 (Unaudited)			6

Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31 , 202 4 and 202 3 (Unaudited)			7

Consolidated Statements of Cash Flows for the Three Months Ended March 31 , 202 4 and 202 3 (Unaudited)			8

Notes to Consolidated Financial Statements (Unaudited)			10

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			39

Item 3 – Quantitative and Qualitative Disclosures about Market Risk			57

Item 4 – Controls and Procedures			57

PART II – OTHER INFORMATION			59

Item 1 – Legal Proceedings			59

Item 1A – Risk Factors			59

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			60

Item 3 – Defaults upon Senior Securities			61

Item 4 – Mine Safety Disclosures			61

Item 5 – Other Information			61

Item 6 – Exhibits			62

Signatures			63

Unless the context otherwise requires, the terms "Mid Penn", "Corporation" "we", "us", and "our" refer to Mid Penn Bancorp, Inc. and its consolidated wholly-owned banking subsidiary and nonbank subsidiaries.

Table of Contents

GLOSSARY OF DEFINED ACRONYMS AND TERMS


2014 Plan			2014 Restricted Stock Plan
2023 Annual Report			Corporation's Annual Report on Form 10-K for the year ended December 31, 2023
2023 Plan			2023 Stock Incentive Plan
ACL			Allowance for Credit Losses
AFS			Available for Sale
AOCI			Accumulated Other Comprehensive Income
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
the Bank			Mid Penn Bank
Bank Merger			Merger of Brunswick Bank with and into Mid Penn Bank
BOLI			Bank Owned Life Insurance
bp or bps			basis point(s)
Brunswick			Brunswick Bancorp
Brunswick Acquisition			Merger acquisition of Brunswick
Brunswick Bank			Brunswick Bank & Trust Company
CECL			Current Expected Credit Losses
DCF			Discounted Cash Flow
DIF			FDIC’s Deposit Insurance Fund
DRIP			Dividend Reinvestment Plan
FASB			Financial Accounting Standards Board
FDIC			Federal Deposit Insurance Corporation
FHLB			Federal Home Loan Bank of Pittsburgh
FICO			the Financing Corporation
FOMC			Federal Open Market Committee
FTE			Fully taxable-equivalent
HFS			Held for Sale
HTM			Held to Maturity
LGD			Loss Given Default
LHFI			Loans held for investment
LIHTC			Low-Income Housing Tax Credits
Loans			Loans, net of unearned interest
Management Discussion			Management's Discussion and Analysis of Financial Condition and Results of Operations
Merger			Merger of Brunswick with and into Mid Penn
Merger Agreement			Agreement and Plan of Merger between Mid Penn and Brunswick
Mid Penn or the Corporation			Mid Penn Bancorp, Inc.
N/M			Not meaningful - (percentage changes greater than +/- 150% not considered meaningful)
OBS			Off-Balance Sheet
OCI			Other Comprehensive Income
PCD			Purchased Credit Deteriorated
PCL			Provision for Credit Losses
PD			Probability of Default
Riverview			Riverview Financial Corporation
Riverview Acquisition			Merger acquisition of Riverview
ROA			Return on Assets
ROE			Return on Equity
SBA			Small Business Association
SEC			Securities Exchange Commission
SOFR			Secured Overnight Financing Rate

Table of Contents

MID PENN BANCORP, INC.

PART 1 – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(In thousands, except per share data)	March 31, 2024		December 31, 2023
ASSETS
Cash and due from banks	$	33,362	$	45,435
Interest-bearing balances with other financial institutions	31,801		34,668
Federal funds sold	2,922		16,660
Total cash and cash equivalents	68,085		96,763
Investment securities:
HTM, at amortized cost (fair value $ 351,204 and $ 357,521 )	396,998		399,128
AFS, at fair value	217,632		223,555
Equity securities available for sale, at fair value	431		438
Loans held for sale, at fair value	4,581		3,855
Loans, net of unearned interest	4,317,449		4,252,792
Less: ACL - Loans	( 33,524 )		( 34,187 )
Net loans	4,283,925		4,218,605

Premises and equipment, net	36,068		36,909
Operating lease right of use asset	8,414		8,953
Finance lease right of use asset	2,683		2,727
Cash surrender value of life insurance	52,997		54,497
Restricted investment in bank stocks	17,446		16,768
Accrued interest receivable	26,975		25,820
Deferred income taxes	22,894		24,146
Goodwill	127,031		127,031
Core deposit and other intangibles, net	6,051		6,479
Foreclosed assets held for sale	5,110		293
Other assets	53,058		44,825
Total Assets	$	5,330,379	$	5,290,792

LIABILITIES & SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	807,861	$	801,312
Interest-bearing transaction accounts	2,082,846		2,086,450
Time	1,488,398		1,458,450
Total Deposits	4,379,105		4,346,212

Short-term borrowings	271,849		241,532
Long-term debt	23,941		59,003
Subordinated debt	46,201		46,354
Operating lease liability	8,683		9,285
Accrued interest payable	16,330		14,257
Other liabilities	33,302		31,799
Total Liabilities	4,779,411		4,748,442

Shareholders' Equity:
Common stock, par value $ 1.00 per share; 40,000,000 shares authorized at March 31, 2024 and December 31, 2023; 17,006,359 issued at March 31, 2024 and 16,998,929 at December 31, 2023; 16,565,637 outstanding at March 31, 2024 and 16,573,707 at December 31, 2023	17,006		16,999
Additional paid-in capital	406,150		405,725
Retained earnings	154,801		145,982
Accumulated other comprehensive loss	( 16,947 )		( 16,637 )
Treasury stock, at cost; 440,722 shares at March 31, 2024 and 425,222 shares at December 31, 2023	( 10,042 )		( 9,719 )
Total Shareholders’ Equity	550,968		542,350
Total Liabilities and Shareholders' Equity	$	5,330,379	$	5,290,792

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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MID PENN BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


	Three Months Ended March 31,
(In thousands, except per share data)		2024		2023
INTEREST INCOME
Loans, including fees		$	63,236	$	45,865
Investment securities:
Taxable		4,040		3,874
Tax-exempt		376		389
Other interest-bearing balances		403		53
Federal funds sold		136		45
Total Interest Income		68,191		50,226
INTEREST EXPENSE
Deposits		26,332		12,001
Short-term borrowings		4,446		1,490
Long-term and subordinated debt		957		686
Total Interest Expense		31,735		14,177
Net Interest Income		36,456		36,049


(Benefit)/Provision for credit losses		( 937 )		719
Net Interest Income After (Benefit)/Provision for Credit Losses		37,393		35,330
NONINTEREST INCOME
Fiduciary and wealth management		1,132		1,236
ATM debit card interchange		945		1,056
Service charges on deposits		509		435
Mortgage banking		424		384
Mortgage hedging		—		20
Net gain on sales of SBA loans		107		—
Earnings from cash surrender value of life insurance		284		254

Other		2,436		940
Total Noninterest Income		5,837		4,325
NONINTEREST EXPENSE
Salaries and employee benefits		15,462		13,844
Software licensing and utilization		2,120		1,946
Occupancy, net		1,982		1,886
Equipment		1,222		1,251
Shares tax		997		899
Legal and professional fees		998		800
ATM/card processing		534		493
Intangible amortization		428		344
FDIC Assessment		945		340

Merger and acquisition		—		224

Other		3,832		3,814
Total Noninterest Expense		28,520		25,841
INCOME BEFORE PROVISION FOR INCOME TAXES		14,710		13,814
Provision for income taxes		2,577		2,587
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		$	12,133	$	11,227

PER COMMON SHARE DATA:
Basic Earnings Per Common Share		$	0.73	$	0.71
Diluted Earnings Per Common Share		$	0.73	$	0.70
Weighted-average basic shares outstanding		16,567,902		15,886,186
Weighted-average diluted shares outstanding		16,613,373		15,931,121

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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MID PENN BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


	Three Months Ended March 31,
(In Thousands)	2024		2023
Net income	$	12,133	$	11,227

Other comprehensive (loss)/income:

Unrealized (losses)/gains arising during the period on available for sale securities, net of income tax benefit/(cost) of $ 455 and ($ 526 ), respectively. (1)	( 1,711 )		1,977



Unrealized holding gains/(losses) arising during the period on interest rate derivatives used in cash flow hedges, net of income tax (cost)/benefit of ($ 375 ) and $ 34 , respectively. (1)	1,410		( 128 )

Change in defined benefit plans, net of income tax (cost)/benefit of ($ 2 ) and $ 1 , respectively (1), (2)	8		5

Reclassification adjustment for settlement gains and activity related to benefit plans, net of income tax benefit of $ 5 and $ 3 , respectively (1), (3)	( 17 )		( 12 )

Total other comprehensive (loss)/income	( 310 )		1,842

Total comprehensive income	$	11,823	$	13,069

(1) The income tax impacts of the components of other comprehensive income are calculated using a 21% statutory tax rate.

(2) The change in defined benefit plans consists primarily of unrecognized actuarial (losses)/gains on defined benefit plans during the period.

(3) The reclassification adjustment for benefit plans includes settlement gains, amortization of prior service costs, and amortization of net gain or loss. Amounts are included in other income on the Consolidated Statements of Income within total noninterest income.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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MID PENN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Treasury Stock		Total Shareholders' Equity
(In thousands, except per share data)	Shares	Amount
Balance, January 1, 2024	16,998,929	$	16,999	$	405,725	$	145,982	$	( 16,637 )	$	( 9,719 )	$	542,350
Net income	—	—		—		12,133		—		—		12,133
Total other comprehensive income, net of taxes	—	—		—		—		( 310 )		—		( 310 )
Common stock cash dividends declared - $ 0.20 per share	—	—		—		( 3,314 )		—		—		( 3,314 )
Repurchased stock	—	—		—		—		—		( 323 )		( 323 )
Employee Stock Purchase Plan	5,653	5		107		—		—		—		112
Director Stock Purchase Plan	1,777	2		34		—		—		—		36
Restricted stock activity	—	—		284		—		—		—		284
Balance, March 31, 2024	17,006,359	$	17,006	$	406,150	$	154,801	$	( 16,947 )	$	( 10,042 )	$	550,968


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders' Equity
(In thousands, except per share data)	Shares	Amount
Balance, January 1, 2023	16,094,486	$	16,094	$	386,987	$	133,114	$	( 19,216 )	$	( 4,880 )	$	512,099
Net income	—	—		—		11,227		—		—		11,227
Total other comprehensive loss, net of taxes	—	—		—		—		1,842		—		1,842
Common stock cash dividends declared, $ 0.20 per share	—	—		—		( 3,176 )		—		—		( 3,176 )
Impact of adopting CECL (1)	—	—		—		( 11,548 )		—		—		( 11,548 )
Employee Stock Purchase Plan	2,217	2		55		—		—		—		57
Director Stock Purchase Plan	1,651	2		41		—		—		—		43
Restricted stock activity	—	—		249		—		—		—		249
Balance, March 31, 2023	16,098,354	$	16,098	$	387,332	$	129,617	$	( 17,374 )	$	( 4,880 )	$	510,793

(1) The Corporation adopted ASU 2016-13 "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" effective January 1, 2023. See "Note 1 - Summary of Significant Accounting Policies" for further details.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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MID PENN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
(In thousands)	2024		2023
Operating Activities:
Net Income	$	12,133	$	11,227
Adjustments to reconcile net income to net cash provided by operating activities:
(Benefit)/Provision for credit losses	( 937 )		719
Depreciation	1,192		1,202
Amortization of intangibles	428		344
Net amortization of security discounts/premiums	102		127
Noncash operating lease expense	539		509
Amortization of finance lease right of use asset	44		45

Earnings on cash surrender value of life insurance	( 284 )		( 254 )
Mortgage loans originated for sale	( 16,808 )		( 24,615 )
Proceeds from sales of mortgage loans originated for sale	16,506		24,797
Gain on sale of mortgage loans	( 424 )		( 384 )
SBA loans originated for sale	( 1,553 )		—
Proceeds from sales of SBA loans originated for sale	1,446		—
Gain on sale of SBA loans	( 107 )		—
Gain on sale of property, plant, and equipment	( 32 )		( 31 )



Accretion of subordinated debt	( 153 )		( 147 )
Stock compensation expense	284		249
Change in deferred income tax benefit	1,402		706


Increase accrued interest receivable	( 1,155 )		( 800 )
Decrease (Increase) in other assets	( 3,484 )		775
Increase (decrease) in accrued interest payable	2,073		3,506
Decrease in operating lease liability	( 602 )		( 580 )
(Decrease) Increase in other liabilities	1,799		( 4,217 )
Net Cash Provided By Operating Activities	12,409		13,178

Investing Activities:

Proceeds from the maturity or call of available-for-sale securities	3,741		3,743

Proceeds from the maturity or call of held-to-maturity securities	2,045		2,611

Stock dividends of FHLB and other bank stock	239		110
(Purchases) reduction of restricted investment in bank stock	( 917 )		164

Net increase in loans	( 68,987 )		( 97,156 )
Purchases of bank premises and equipment	( 351 )		( 922 )
Proceeds from the sale of premises and equipment	32		31




Net change in investments in tax credits and other partnerships	( 1,548 )		( 2,174 )
Net Cash Used in Investing Activities	( 65,746 )		( 93,593 )

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MID PENN BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(CONTINUED)


Financing Activities:
Net increase in deposits	32,893		99,750

Common stock dividends paid	( 3,314 )		( 3,176 )
Proceeds from Employee and Director Stock Purchase Plan stock issuance	148		100

Treasury stock purchased	( 323 )		—

Net change in finance lease liability	( 24 )		( 23 )
Net change in short-term borrowings	30,317		( 14,647 )
Long-term debt repayment	( 35,038 )		( 70 )


Net Cash Provided by Financing Activities	24,659		81,934

Net (decrease)/ increase in cash and cash equivalents	( 28,678 )		1,519
Cash and cash equivalents, beginning of period	96,763		60,881
Cash and cash equivalents, end of period	$	68,085	$	62,400

Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	29,662	$	10,671


Supplemental Noncash Disclosures:
Recognition of operating lease right of use assets	$	—	$	125
Recognition of operating lease liabilities	—		125

Loans transferred to foreclosed assets held for sale	4,817		205

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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MID PENN BANCORP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 - Summary of Significant Accounting Policies

Nature of Operations

Mid Penn Bancorp, Inc. ("Mid Penn" or the "Corporation"), through operations conducted by Mid Penn Bank (the "Bank") and its nonbank subsidiaries, engages in a full-service commercial banking and trust business, making available to the community a wide range of financial services, including, but not limited to, mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development loans, loans to non-profit entities and local government loans, and various types of time and demand deposits including but not limited to, checking accounts, savings accounts, clubs, money market deposit accounts, certificates of deposit, and IRAs. In addition, the Bank provides a full range of trust and wealth management services through its Trust Department. Deposits are insured by the Federal Deposit Insurance Corporation ("FDIC") to the extent provided by law.

Mid Penn also fulfills the insurance needs of both existing and potential customers through MPB Risk Services, LLC, doing business as MPB Insurance and Risk Management.

The financial services are provided to individuals, partnerships, non-profit organizations, and corporations through its retail banking offices located in throughout Pennsylvania and two counties in New Jersey.

Basis of Presentation

For all periods presented, the accompanying consolidated financial statements include the accounts of Mid Penn Bancorp, Inc., its wholly-owned subsidiary, Mid Penn Bank, and four nonbank subsidiaries, MPB Financial Services, LLC, which includes MPB Wealth Management, LLC (which ceased operating during the first quarter of 2024) and MPB Risk Services, LLC, and MPB Launchpad Fund I, LLC. As of March 31, 2024, the accounts and activities of these nonbank subsidiaries were not material to warrant separate disclosure or segment reporting. As a result, Mid Penn has only one reportable segment for financial reporting purposes. All material intercompany accounts and transactions have been eliminated in consolidation.

Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. Mid Penn believes the information presented is not misleading, and the disclosures are adequate. For comparative purposes, the March 31, 2023 and December 31, 2023 balances have been reclassified, when necessary, to conform to the 2024 presentation. Such reclassifications had no impact on net income or total shareholders’ equity. In the opinion of management, all adjustments necessary for fair presentation of the periods presented have been reflected in the accompanying consolidated financial statements. All such adjustments are of a normal, recurring nature. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the 2023 Annual Report.

Mid Penn has evaluated events and transactions occurring subsequent to the balance sheet date of March 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.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Material estimates subject to significant change include the allowance for credit losses, the expected cash flows and collateral values associated with loans that are individually evaluated for credit losses, the carrying value of other real estate owned ("OREO"), the fair value of financial instruments, business combination fair value computations, the valuation of goodwill and other intangible assets, stock-based compensation and deferred income tax assets.

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MID PENN BANCORP, INC.

Accounting Standards adopted and Updated Significant Accounting Policy

On January 1, 2023, the Corporation adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments , which replaced the incurred loss methodology, and is referred to as CECL. The measurement of expected credit losses under CECL is applicable to financial 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 instruments) and net investments in leases recognized by a lessor in accordance with ASC Topic 842. Prior to 2024, the provision for OBS credit losses was included in Other Expenses on the Statement of Income. As of March 31, 2024, the provision for OBS credit losses is included in Provision for Credit Losses on the Income Statement. Prior periods have been updated for presentation.

All other significant accounting policies used in preparation of the Consolidated Financial Statements are disclosed in the 2023 Annual Report. Those significant accounting policies are unchanged at March 31, 2024.

Accounting Standards Pending Adoption

ASU No. 2023-02: The FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.

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 apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to apply the proportional amortization method at the reporting entity level or to individual investments. The amendments in this update also remove certain guidance for Qualified Affordable Housing Project investments and require the application of the delayed equity contribution guidance to all tax equity investments. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and must be applied on either a modified retrospective or a retrospective basis. Early adoption is permitted in any interim period, however if adopted in an interim period the entity shall adopt the amendments in this update as of the beginning of the fiscal year that includes the interim period. The Corporation does not expect the adoption of ASU No. 2023-02 to have a material impact on its consolidated financial statements.

ASU 2023-06: The FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

ASU 2023-06 amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532 - Disclosure Update and Simplification that was issued in 2018. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. ASU 2023-06 is not expected to have a significant impact on our financial statements.

ASU 2023-07: The FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures

ASU 2023-07 amends the ASC to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 is not expected to have a significant impact on our financial statements.

ASU 2023-09 : The FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

ASU 2023-09 amends the ASC to enhance income tax disclosures by requiring entities to disclose income taxes paid (net of refunds received) disaggregated by federal, state and foreign taxes. Additionally, entities are required to disclose amounts greater than 5% of the total income taxes paid to an individual jurisdiction The amendments are effective for annual periods beginning after December 15, 2025. ASU 2023-09 is not expected to have a significant impact on our financial statements.

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ASU 2024-01 —The FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718): Scope application of profits interest and similar awards

The amendments in the ASU apply to all reporting entities that account for profits interest awards as compensation to employees or nonemployees in return for goods or services. The amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. ASU 2024-01 is not expected to have a significant impact on our financial statements.

ASU 2024-02 : The FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements

This ASU contains amendments to the Codification that remove references to various FASB Concepts Statements. The amendments are effective for fiscal years beginning after Dec. 15, 2025. Early adoption is permitted. ASU 2024-02 is not expected to have a significant impact on our financial statements.

Note 2 - Business Combination

Brunswick Acquisition

On May 19, 2023, Mid Penn completed its acquisition of Brunswick through the merger of Brunswick with and into Mid Penn with Mid Penn being the surviving corporation. In connection with this acquisition, Brunswick Bank, a wholly-owned subsidiary of Brunswick, merged with and into Mid Penn Bank, a wholly-owned subsidiary of Mid Penn.

This transaction included the acquisition of 5 branches and extended Mid Penn’s footprint 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 Brunswick shareholders of $ 27.6 million, for total consideration of $ 45.7 million for all outstanding stock and the cancellation of stock options of Brunswick.

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 identifiable assets acquired. The fair 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 income tax purposes.

Purchased loans and leases that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. Mid Penn considers various factors in connection with the identification of more-than-insignificant deterioration in credit, including but not limited to nonperforming status, delinquency, risk ratings, FICO scores and other qualitative factors that indicate deterioration in credit quality since origination. For PCD loans and leases, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and leases held-for-investment. As part of the Brunswick 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 fair value was $ 16.3 million. The initial provision expense for non-PCD loans associated with the Brunswick Acquisition was $ 2.0 million.

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Estimated fair values of the assets acquired and liabilities assumed in the Brunswick Acquisition as of the closing date are as follows:


(In thousands)
Assets acquired:
Cash and cash equivalents	$	21,029
Federal funds 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 insurance	3,361
Deferred income taxes	6,393
Accrued interest receivable	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
Accrued interest payable	1,911
Other liabilities	1,613
Total liabilities 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 fair values of all assets and liabilities shown in the table above and all amounts are considered final.

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Note 3 - Investment Securities

FASB ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," was adopted by Mid Penn on January 1, 2023. ASU 2016-13 introduces the CECL methodology for estimating allowances for credit losses. ASU 2016-13 applies to all financial instruments carried at amortized cost, including HTM securities, and makes targeted improvements to the accounting for credit losses on AFS securities.

In order to comply with ASC 326, Mid Penn conducted a review of its investment portfolio and determined that for certain classes of securities it would be appropriate to assume the expected credit loss to be zero. This zero-credit loss assumption applies to debt issuances of the U.S. Treasury and agencies and instrumentalities of the United States government. The reasons behind the adoption of the zero-credit loss assumption are as follows:

• High credit rating

• Long history with 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 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 information 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 ASU 2016-13 was deemed immaterial due to the composition of these portfolios. Both portfolios consist primarily of U.S. government agency guaranteed mortgage-backed securities for which the risk of loss is minimal. Therefore, Mid Penn did not recognize a cumulative effect adjustment through retained earnings related to the AFS and HTM securities.

AFS Securities

ASU 2016-13 makes targeted improvements to the accounting for credit losses on AFS securities. The concept of other-than-temporarily impaired has been replaced with the allowance for 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 identified, in order to determine whether a decline in fair value resulted from a credit loss or other factors, Mid Penn performs further 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/or 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 effective 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 contractual maturities, as well as third-party credit ratings and cumulative default rates published annually by a reputable third-party.

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At March 31, 2024, the results of the analysis did not identify any securities that violate the credit loss triggers; therefore, no DCF analysis was performed and no credit loss was recognized on any of the securities available for sale.

Accrued interest receivable is excluded from the estimate of credit losses for AFS securities. At March 31, 2024, accrued interest receivable totaled $ 982 thousand for AFS securities and was reported in accrued interest receivable on the accompanying Consolidated Balance Sheet.

HTM Securities

ASU 2016-13 requires institutions to measure expected credit losses on financial 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 portfolio is segmented into agency and non-agency securities.

• The non-agency securities are separated into state and political subdivision obligations and corporate debt securities.

Each individual segment is categorized by third-party credit ratings.

As discussed above, Mid Penn has determined that for certain classes of securities it would be appropriate to assume the expected credit loss to be zero, which include debt issuances of the U.S. Treasury and agencies and instrumentalities of the United States government. This assumption will be reviewed and attested to quarterly.

At March 31, 2024, Mid Penn’s HTM securities totaled $ 397.0 million. After applying appropriate probability of default and loss given default assumptions, the total amount of current expected credit losses was deemed immaterial. Therefore, no reserve was recorded at March 31, 2024.

Accrued interest receivable is excluded from the estimate of credit losses for HTM securities. At March 31, 2024, accrued interest receivable totaled $ 2.2 million for HTM securities and was reported in accrued interest receivable on the accompanying Consolidated Balance Sheet.

At March 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 March 31, 2024.

The amortized cost and estimated fair value of investment securities for the periods presented:


	March 31, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale
U.S. Treasury and U.S. government agencies	$	36,664	$	—	$	1,174	$	35,490
Mortgage-backed U.S. government agencies	165,402		—		18,637		146,765
State and political subdivision obligations	4,326		—		693		3,633
Corporate debt securities	35,737		—		3,993		31,744
Total available-for-sale debt securities	242,129		—		24,497		217,632
Held-to-maturity
U.S. Treasury and U.S. government agencies	$	245,839	$	—	$	30,821	$	215,018
Mortgage-backed U.S. government agencies	42,376		—		5,869		36,507
State and political subdivision obligations	83,318		2		6,958		76,362
Corporate debt securities	25,465		—		2,148		23,317
Total held-to-maturity debt securities	396,998		2		45,796		351,204
Total	$	639,127	$	2	$	70,293	$	568,836

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	December 31, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale
U.S. Treasury and U.S. government agencies	$	36,637	$	—	$	988	$	35,649
Mortgage-backed U.S. government agencies	169,184		—		16,501		152,683
State and political subdivision obligations	4,332		—		686		3,646
Corporate debt securities	35,733		—		4,156		31,577
Total available-for-sale debt securities	$	245,886	$	—	$	22,331	$	223,555
Held-to-maturity
U.S. Treasury and 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 subdivision obligations	84,035		11		6,486		77,560
Corporate debt securities	25,470		—		935		24,535
Total held-to-maturity debt securities	399,128		13		41,620		357,521
Total	$	645,014	$	13	$	63,951	$	581,076

Estimated fair values of debt securities are based on quoted market prices, where applicable. If quoted market prices are not available, fair values are based on quoted market prices of instruments of a similar type, credit quality and structure, adjusted for differences between the quoted instruments and the instruments being valued. See "Note 8 - Fair Value Measurement," for additional information.

Investment securities having a fair value of $ 383.9 million at March 31, 2024 and $ 380.3 million at December 31, 2023 were pledged 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 $ 142.9 million as of March 31, 2024 and $ 153.5 million as of December 31, 2023.

The following tables present gross unrealized losses and fair value of debt investment securities aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position for the periods presented:


(Dollars in thousands)	Less Than 12 Months					12 Months or More					Total
March 31, 2024	Number of Securities	Estimated Fair Value		Gross Unrealized Losses		Number of Securities	Estimated Fair Value		Gross Unrealized Losses		Number of Securities	Estimated Fair Value		Gross Unrealized Losses
Available-for-sale debt securities:
U.S. Treasury and U.S. government agencies	—	$	—	$	—	19	$	35,490	$	1,174	19	$	35,490	$	1,174
Mortgage-backed U.S. government agencies	—	—		—		93	146,765		18,637		93	146,765		18,637
State and political subdivision obligations	—	—		—		8	3,633		693		8	3,633		693
Corporate debt securities	—	—		—		18	31,744		3,993		18	31,744		3,993
Total available-for-sale debt securities	—	$	—	$	—	138	$	217,632	$	24,497	138	$	217,632	$	24,497

Held-to-maturity debt securities:
U.S. Treasury and U.S. government agencies	—	—		—		145	215,018		30,821		145	215,018		30,821
Mortgage-backed U.S. government agencies	—	—		—		64	36,507		5,869		64	36,507		5,869
State and political subdivision obligations	16	5,846		86		177	70,201		6,872		193	76,047		6,958
Corporate debt securities	—	—		—		15	23,317		2,148		15	23,317		2,148
Total held-to-maturity debt securities	16	5,846		86		401	345,043		45,710		417	350,889		45,796
Total	16	$	5,846	$	86	539	$	562,675	$	70,207	555	$	568,521	$	70,293

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(Dollars in thousands)	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
Available-for-sale securities:
U.S. Treasury and 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 subdivision 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 available-for-sale securities	2	4,425		116		136	219,130		22,215		138	223,555		22,331

Held-to-maturity securities:
U.S. Treasury and 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 subdivision 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 maturity 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

There were no gross realized gains and losses on sales of available-for-sale debt securities for the three months ended March 31, 2024 and 2023.

The table below illustrates the contractual maturity of debt investment securities at amortized cost and estimated fair value. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay with or without call or prepayment penalties.


(In thousands)	Available-for-sale				Held-to-maturity
March 31, 2024	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in 1 year or less	$	12,496	$	12,380	$	13,047	$	12,906
Due after 1 year but within 5 years	34,425		32,819		125,456		116,182
Due after 5 years but within 10 years	27,475		23,743		195,525		168,141
Due after 10 years	2,331		1,925		20,594		17,468
	76,727		70,867		354,622		314,697
Mortgage-backed securities	165,402		146,765		42,376		36,507
	$	242,129	$	217,632	$	396,998	$	351,204

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Note 4 - Loans and Allowance for Credit Losses - Loans

Mid Penn adopted the amendments of FASB ASU 2016-13, on January 1, 2023. The amendments of ASU 2016-13 created FASB ASC Topic 326, "Financial Instruments – Credit Losses," which, among other things, replace much of the guidance and disclosures previously provided in FASB ASC Topic 310, "Receivables." The guidance in FASB ASC Topic 326 replaces the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit losses. In accordance with FASB ASC Subtopic 326-20, "Financial Instruments – Credit Losses – Measured at Amortized Cost," Mid Penn has developed an ACL methodology effective January 1, 2023, which replaces its previous allowance for loan losses methodology. See the section captioned "Allowance for Credit Losses, effective January 1, 2023" within this note for additional information regarding Mid Penn’s ACL.

Loans, net of unearned income, are summarized as follows by portfolio segment:


(In thousands)	March 31, 2024		December 31, 2023
Commercial real estate
CRE Nonowner Occupied	$	1,174,774	$	1,149,553
CRE Owner Occupied	622,574		629,904
Multifamily	334,952		309,059
Farmland	212,018		212,690
Total Commercial real estate	2,344,318		2,301,206
Commercial and industrial	671,395		675,079
Construction
Residential Construction	103,861		92,843
Other Construction	383,428		362,624
Total Construction	487,289		455,467
Residential mortgage
1-4 Family 1st Lien	334,557		339,142
1-4 Family Rental	340,052		341,937
HELOC and Junior Liens	132,703		132,795
Total Residential Mortgage	807,312		813,874
Consumer	7,135		7,166
Total loans	$	4,317,449	$	4,252,792

Total loans are stated at the amount of unpaid principal, adjusted for net deferred fees and costs. Net deferred loan fees of $ 4.0 million and $ 4.2 million reduced the carrying value of loans as of March 31, 2024 and December 31, 2023, respectively.

Accrued interest receivable is not included in the amortized cost basis of Mid Penn's loans. At March 31, 2024, accrued interest receivable for loans totaled $ 23.2 million with no related ACL and was reported in other assets on the accompanying Consolidated Balance Sheet.

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Past Due and Nonaccrual Loans

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The classes of the loan portfolio summarized by the past due status as of March 31, 2024 and December 31, 2023, are summarized as follows:


(In thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Receivable > 90 Days and Accruing
March 31, 2024
Commercial real estate	$	9,647	$	—	$	778	$	10,425	$	2,333,893	$	2,344,318	$	—
Commercial and industrial	—		87		1,771		1,858		669,537		671,395		—
Construction	—		—		—		—		487,289		487,289		—
Residential mortgage	1,328		387		2,201		3,916		803,396		807,312		—
Consumer	18		—		25		43		7,092		7,135		25






Total	$	10,993	$	474	$	4,775	$	16,242	$	4,301,207	$	4,317,449	$	25


(In thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Receivable > 90 Days and Accruing
December 31, 2023
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		—
Construction	—		270		2,559		2,829		452,638		455,467		—
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	$	—

Loans are placed on nonaccrual status when management determines that the full repayment of principal and collection of interest according to contractual terms is no longer likely, generally when the loan becomes 90 days or more past due. Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of March 31, 2024 and December 31, 2023 are summarized as follows:


	March 31, 2024						December 31, 2023
(In thousands)	With a Related Allowance		Without a Related Allowance		Total		With a Related Allowance		Without a Related Allowance		Total
Commercial real estate	$	449	$	4,139	$	4,588	$	454	$	6,133	$	6,587
Commercial and industrial	1,202		1,156		2,358		1,222		64		1,286
Construction	—		—		—		—		2,559		2,559
Residential mortgage	41		3,402		3,443		2		3,782		3,784
Consumer	—		—		—		—		—		—
	$	1,692	$	8,697	$	10,389	$	1,678	$	12,538	$	14,216

The amount of interest income recognized on nonaccrual loans was approximately $ 159 thousand and $ 182 thousand during the three months ended March 31, 2024 and 2023, respectively.

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Credit Quality Indicators

Mid Penn categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. On a minimum of a quarterly basis, Mid Penn analyzes loans individually to classify the loans as to their credit risk. The following table presents risk ratings by loan portfolio segment and origination year, which is the year of origination or renewal.

PASS - This type of classification consists of 6 subcategories:

Nominal Risk / Pass - This loan classification is a credit extension of the highest quality.

Moderate Risk / Pass - This type of classification has strong financial ratios, substantial debt capacity, and low leverage with a very favorable comparison to industry peers or better than average improving trends are necessary to be in this classification.

Good Acceptable Risk / Pass - The Borrower in this rating classification is a reasonable credit risk having financial ratios on par with its peers and demonstrates slightly improving trends over time; they list good quality assets and fairly low leverage plus ample debt capacity.

Average Acceptable Risk / Pass - This type of classification has financial ratios and assets are of above average quality, the leverage is worse than average compared to industry standards; the Borrower should have a good repayment history and possess consistent earnings with some growth.

Marginally Acceptable Risk / Pass - This type of classification has financial ratios consistent with industry averages, assets of average quality with ascertainable values, acceptable leverage, moderate capital assets and an acceptable reliance on trade debt; the Borrower demonstrates marginally adequate earnings, cash flow and debt service plus positive trends.

Weak/Monitor Risk (Watch list) / Pass - This type of classification has financial ratios are slightly below standard industry averages and assets are below average quality with unstable values; fixed assets could be near or at the end of their useful life plus liabilities may not match the asset structure.

SPECIAL MENTION - These credits have developing weaknesses deserving extra attention from the lender and lending management. They are currently protected, but potentially weak. The weakness may be, cash flow, leverage, liquidity, management, industry or other factors which may, if not checked or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date.

SUBSTANDARD - These credit extensions also have well defined weaknesses, which are inadequately protected by the current worth and debt service capacity of the Borrowers, or the collateral pledged, if any. The repayment of principal and interest as originally intended can be jeopardized by defined weaknesses related to adverse financial, managerial, economic, market or political conditions.

DOUBTFUL - These credits have definite weaknesses inherent in Substandard loans with added characteristics that are severe enough to make further collection in full highly questionable and improbable based on the current trends.

LOSS . These loans are considered uncollectible and no longer a viable asset of the Bank. They lack an identifiable source of repayment based on an inability to generate sufficient cash flow to service their debt. All trends are negative and the damage to the financial condition of the Borrower can’t be reversed now or in the near future.

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MID PENN BANCORP, INC.


	March 31, 2024
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis

(In thousands)	2024		2023		2022		2021		2020		Prior				Total
Commercial real estate
Pass	$	49,466	$	289,970	$	568,000	$	372,639	$	293,680	$	688,117	$	43,525	$	2,305,397
Special mention	—		188		434		—		—		16,407		191		17,220
Substandard or lower	—		—		2,990		206		3,146		15,313		46		21,701
Total commercial real estate	49,466		290,158		571,424		372,845		296,826		719,837		43,762		2,344,318



Commercial and industrial
Pass	33,909		147,232		97,313		62,551		28,200		104,941		189,231		663,377
Special mention	—		79		61		282		—		2,280		2,272		4,974
Substandard or lower	—		—		—		591		—		1,938		515		3,044
Total commercial and industrial	33,909		147,311		97,374		63,424		28,200		109,159		192,018		671,395



Construction
Pass	13,362		164,703		185,710		56,475		20,419		16,024		28,785		485,478
Special mention	—		—		—		—		1,811		—		—		1,811
Substandard or lower	—		—		—		—		—		—		—		—
Total construction	13,362		164,703		185,710		56,475		22,230		16,024		28,785		487,289



Residential mortgage
Performing	25,512		145,753		148,963		109,236		87,274		197,768		84,656		799,162
Non-performing	—		178		—		79		1,666		6,129		98		8,150
Total residential mortgage	25,512		145,931		148,963		109,315		88,940		203,897		84,754		807,312
Gross charge offs	—		—		( 21 )		—		—		( 7 )		—		( 28 )

Net charge offs	—		—		( 21 )		—		—		( 7 )		—		( 28 )
Consumer
Performing	1,550		1,251		622		591		221		281		2,619		7,135
Non-performing	—		—		—		—		—		—		—		—
Total consumer	1,550		1,251		622		591		221		281		2,619		7,135
Gross charge offs	( 16 )		—		( 2 )		—		—		( 4 )		—		( 22 )
Current period recoveries	5		—		—		—		—		1.00		—		6
Net charge offs	( 11 )		—		( 2 )		—		—		( 3 )		—		( 16 )
Total
Pass	$	96,737	$	601,905	$	851,023	$	491,665	$	342,299	$	809,082	$	261,541	$	3,454,252
Special mention	—		267		495		282		1,811		18,687		2,463		24,005
Substandard or lower	—		—		2,990		797		3,146		17,251		561		24,745
Performing	27,062		147,004		149,585		109,827		87,495		198,049		87,275		806,297
Nonperforming	—		178		—		79		1,666		6,129		98		8,150
Total	$	123,799	$	749,354	$	1,004,093	$	602,650	$	436,417	$	1,049,198	$	351,938	$	4,317,449

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MID PENN BANCORP, INC.


	December 31, 2023
	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis

(In thousands)	2023		2022		2021		2020		2019		Prior				Total
Commercial real estate
Pass	$	271,655	$	556,801	$	386,911	$	297,746	$	178,434	$	528,326	$	38,261	$	2,258,134
Special mention	194		—		—		—		6,009		10,482		186		16,871
Substandard or lower	—		5,209		208		3,162		229		17,345		48		26,201
Total commercial real estate	271,849		562,010		387,119		300,908		184,672		556,153		38,495		2,301,206
Gross charge offs	—		—		—		—		—		( 16 )		—		( 16 )

Net charge offs	—		—		—		—		—		( 16 )		—		( 16 )
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
Substandard 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
Gross charge offs	—		( 100 )		—		( 111 )		—		( 27 )		—		( 238 )

Net charge offs	—		( 100 )		—		( 111 )		—		( 27 )		—		( 238 )
Construction
Pass	153,596		181,214		54,658		22,357		10,247		5,856		23,262		451,190
Special mention	—		—		—		1,447		—		—		—		1,447
Substandard or lower	—		573		—		—		—		2,257		—		2,830
Total construction	153,596		181,787		54,658		23,804		10,247		8,113		23,262		455,467



Residential mortgage
Performing	158,634		153,203		111,610		90,382		27,863		178,898		87,723		808,313
Non-performing	—		—		93		1,470		—		3,998		—		5,561
Total residential mortgage	158,634		153,203		111,703		91,852		27,863		182,896		87,723		813,874
Gross charge offs	—		—		—		—		—		( 13 )		—		( 13 )
Current period recoveries	—		—		—		—		—		38		—		38
Net recoveries	—		—		—		—		—		25		—		25
Consumer
Performing	2,361		754		649		273		223		103		2,803		7,166

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
Substandard 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

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MID PENN BANCORP, INC.

Mid Penn had no loans classified as "doubtful" as of March 31, 2024 and December 31, 2023. There was $ 892 thousand and $ 121 thousand in loans for which formal foreclosure proceedings were in process at March 31, 2024 and December 31, 2023.

Collateral-Dependent Loans

A financial asset is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of financial assets deemed collateral-dependent, Mid Penn elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, Mid Penn records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent financial assets consists of various types of real estate, including residential properties; commercial properties such as retail centers, office buildings, and lodging; agriculture land; and vacant land.

Allowance for Credit Losses, effective January 1, 2023

Mid Penn’s ACL - loans methodology is based upon guidance within FASB ASC Subtopic 326-20, as well as regulatory guidance from the FDIC, its primary federal regulator. The ACL - loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the loan portfolio is continuously monitored by management and is reflected within the ACL - loans. The ACL - loans is an estimate of expected losses inherent within Mid Penn’s existing loan portfolio. The ACL - loans is adjusted through the PCL and reduced by the charge off of loan amounts, net of recoveries.

The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Mid Penn’s loan portfolio segments. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations. Determining the appropriateness of the allowance is complex and requires judgement by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.

Mid Penn estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Mid Penn uses a third-party software application to calculate the quantitative portion of the ACL using a methodology and assumptions specific to each loan pool. The qualitative portion of the allowance is based on general economic conditions and other internal and external factors affecting Mid Penn as a whole, as well as specific loans. Factors considered include the following: lending process, concentrations of credit, and 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 reasonable and supportable forecasts.

The methodology for estimating the amount of expected credit losses reported in the ACL has two basic components: a collective, or pooled, component for estimated expected credit losses for pools of loans that share similar risk characteristics, and an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans. In estimating the ACL for the collective component, loans are segregated into loan pools based on loan purpose codes and similar risk characteristics.

The commercial real estate and residential mortgage loan portfolio segments include loans for both commercial and residential properties that are secured by real estate. The underwriting process for these loans includes analysis of the financial position and strength of both the borrower and, if applicable, guarantor, experience with similar projects in the past, market demand and prospects for successful completion of the proposed project within the established budget and schedule, values of underlying collateral, availability of permanent financing, maximum loan-to-value ratios, minimum equity requirements, acceptable amortization periods and minimum debt service coverage requirements, based on property type. The borrower’s financial strength and capacity to repay their obligations remain the primary focus of underwriting. Financial strength is evaluated based upon analytical tools that consider historical and projected cash flows and performance, in addition to analysis of the proposed project for income-producing properties. Additional support offered by guarantors is also considered when applicable. Ultimate repayment of these loans is sensitive to interest rate changes, general economic conditions, liquidity and availability of long-term financing.

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MID PENN BANCORP, INC.

The commercial and industrial loan portfolio segment includes commercial loans made to many types of businesses for various purposes, such as short-term working capital loans that are usually secured by accounts receivable and inventory, equipment and fixed asset purchases that are secured by those assets, and term financing for those within Mid Penn’s geographic markets. Mid Penn’s credit underwriting process for commercial and industrial loans includes analysis of historical and projected cash flows and performance, evaluation of financial strength of both borrowers and guarantors as reflected in current and detailed financial information, and evaluation of underlying collateral to support the credit.

The consumer loan portfolio segment is comprised of loans which are underwritten after evaluating a borrower’s capacity, credit and collateral. Several factors are considered when assessing a borrower’s capacity, including the borrower’s employment, income, current debt, assets and level of equity in the property. Credit is assessed using a credit report that provides credit scores and the borrower’s current and past information about their credit history. Loan-to-value and debt-to-income ratios, loan amount and lien position are also considered in assessing whether to originate a loan. These borrowers are particularly susceptible to downturns in economic trends, such as conditions that negatively affect housing prices and demand and levels of unemployment.

Mid Penn utilizes a DCF method to estimate the quantitative portion of the allowance for credit losses for loan pools. The DCF is based off of historical losses, including peer data, which is correlated to national unemployment and GDP.

The PD and LGD measures are used in conjunction with prepayment data as inputs into the DCF model to calculate the cash flows at the individual loan level. Contractual cash flows based on loan terms are adjusted for PD, LGD and prepayments to derive loss cash flows. These loss cash flows are discounted by the loan’s coupon rate to arrive at the discounted cash flow based quantitative loss. The prepayment studies are updated quarterly by a third-party for each applicable pool.

Mid Penn determined that reasonable and supportable forecasts could be made for a twelve-month period for all of its loan pools. To the extent the lives of the loans in the LHFI portfolio extend beyond this forecast period, Mid Penn uses a reversion period of four quarters and reverts to the historical mean on a straight-line basis over the remaining life of the loans.

Qualitative factors used in the ACL methodology include the following:

• Lending process

• Concentrations of credit

• Peer Group Divergence

The ACL for individual loans, such as non-accrual and PCD, that do not share risk characteristics with other loans is measured as the difference between the discounted value of expected future cash flows, based on the effective interest rate at origination, and the amortized cost basis of the loan, or the net realizable value. The ACL is the difference between the loan’s net realizable value and its amortized cost basis (net of previous charge-offs and deferred loan fees and costs), except for collateral-dependent loans. A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The expected credit loss for collateral-dependent loans is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, adjusted for the estimated cost to sell. Fair value estimates for collateral-dependent loans are derived from appraised values based on the current market value or the "as is" value of the collateral, normally from recently received and reviewed appraisals. Current appraisals are ordered on a regular basis based on the inspection date or more often if market conditions necessitate. Appraisals are obtained from state-certified appraisers and are based on certain assumptions, which may include construction or development status and the highest and best use of the property. These appraisals are reviewed by Mid Penn’s Real Estate Administration Group to ensure they are acceptable, and values are adjusted down for costs associated with asset disposal. If the calculated expected credit loss is determined to be permanent or not recoverable, the amount of the expected credit loss is charged off.

Mid Penn may also purchase loans or acquire loans through a business combination. At the purchase or acquisition date, loans are evaluated to determine whether there has been more than insignificant credit deterioration since origination. Loans that have experienced more than insignificant credit deterioration since origination are referred to as PCD loans. In its evaluation of whether a loan has experienced more than insignificant deterioration in credit quality since origination, Mid Penn takes into consideration loan grades, past due and nonaccrual status. Mid Penn may also consider external credit rating agency ratings for borrowers and for non-commercial loans, FICO score or band, probability of default levels, and number of times past due. At the purchase or acquisition date, the amortized cost basis of PCD loans is equal to the

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MID PENN BANCORP, INC.

purchase price and an initial estimate of credit losses. The initial recognition of expected credit losses on PCD loans has no impact on net income. When the initial measurement of expected credit losses on PCD loans is calculated on a pooled loan basis, the expected credit losses are allocated to each loan within the pool. Any difference between the initial amortized cost basis and the unpaid principal balance of the loan represents a noncredit discount or premium, which is accreted (or amortized) into interest income over the life of the loan. Subsequent changes to the ACL on PCD loans are recorded through the PCL. For purchased loans that are not deemed to have experienced more than insignificant credit deterioration since origination and are therefore not deemed PCD, any discounts or premiums included in the purchase price are accreted (or amortized) over the contractual life of the individual loan.

Loans are charged off against the ACL, 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 following tables present the activity in the ACL - loans by portfolio segment for the three months ended March 31, 2024 and three months ended March 31, 2023:


(In thousands)
As of March 31, 2024	Balance at December 31, 2023	Charge offs	Recoveries	Net loans (charged off) recovered	(Benefit)/Provision for credit losses	Balance at March 31, 2024
Commercial Real Estate
CRE Nonowner Occupied	10,267	—	—	—	150	10,417
CRE Owner Occupied	5,646	—	—	—	( 44 )	5,602
Multifamily	2,202	—	—	—	168	2,370
Farmland	2,064	—	—	—	( 62 )	2,002
Commercial and industrial	7,131	—	—	—	( 631 )	6,500
Construction
Residential Construction	1,256	—	—	—	( 80 )	1,176
Other Construction	2,146	—	—	—	25	2,171
Residential Mortgage
1-4 Family 1st Lien	1,207	( 7 )	—	( 7 )	71	1,271
1-4 Family Rental	1,859	( 21 )	—	( 21 )	( 299 )	1,539
HELOC and Junior Liens	389	—	—	—	68	457
Consumer	20	( 22 )	6	( 16 )	15	19
Total	34,187	( 50 )	6	( 44 )	( 619 )	33,524

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(In thousands)	Balance at December 31, 2022		CECL Impact		Charge offs		Recoveries		Net loans (charged off) recovered		Provision/(Benefit) for credit losses		Balance at March 31, 2023
Commercial Real Estate
CRE Nonowner Occupied	$	8,284	$	259	$	—	$	—	$	—	$	( 368 )	$	8,175
CRE Owner Occupied	2,916		91		( 16 )		—		( 16 )		88		3,079
Multifamily	1,111		35		—		—		—		13		1,159
Farmland	831		26		—		—		—		42		899
Commercial and industrial	4,593		6,601		( 111 )		—		( 111 )		186		11,269
Construction
Residential Construction	—		1,270		—		—		—		153		1,423
Other Construction	—		1,931		—		—		—		277		2,208
Residential Mortgage
1-4 Family 1st Lien	370		1,307		( 4 )		—		( 4 )		( 317 )		1,356
1-4 Family Rental	288		731		—		30		30		17		1,066
HELOC and Junior Liens	661		( 230 )		—		—		—		21		452
Consumer	29		154		( 19 )		7		( 12 )		8		179
Unallocated	( 126 )		( 244 )		—		—		—		370		—
Total	$	18,957	$	11,931	$	( 150 )	$	37	$	( 113 )	$	490	$	31,265

The following table presents the ACL for loans and the amortized cost basis of the loans by the measurement methodology used as of March 31, 2024 and December 31, 2023:


(In thousands)	ACL - Loans						Loans
March 31, 2024	Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total ACL - Loans		Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total Loans
Commercial real estate
CRE Nonowner Occupied	$	10,061	$	356	$	10,417	$	1,172,396	$	2,378	$	1,174,774
CRE Owner Occupied	5,602		—		5,602		620,534		2,040		622,574
Multifamily	2,351		19		2,370		334,781		171		334,952
Farmland	2,002		—		2,002		212,018		—		212,018
Commercial and industrial	5,761		739		6,500		669,037		2,358		671,395
Construction
Residential Construction	1,176		—		1,176		103,861		—		103,861
Other Construction	2,171		—		2,171		383,428		—		383,428
Residential mortgage
1-4 Family 1st Lien	1,271		—		1,271		332,822		1,735		334,557
1-4 Family Rental	1,535		4		1,539		339,696		356		340,052
HELOC and Junior Liens	457		—		457		131,351		1,352		132,703
Consumer	19		—		19		7,135		—		7,135
Total	$	32,406	$	1,118	$	33,524	$	4,307,059	$	10,390	$	4,317,449

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MID PENN BANCORP, INC.


(In thousands)	ACL - Loans						Loans
December 31, 2023	Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total ACL - Loans		Collectively Evaluated for Credit Loss		Individually Evaluated for Credit Loss		Total Loans
Commercial real estate
CRE Nonowner Occupied	$	9,906	$	361	$	10,267	$	1,145,048	$	4,505	$	1,149,553
CRE Owner Occupied	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
Construction
Residential Construction	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

Modifications to Borrowers Experiencing Financial Difficulty

From time to time, we may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, or a combination thereof, among other things.

There was one new modification for the quarter ending March 31, 2024. Information related to loans modified (by type of modification), whereby the borrower was experiencing financial difficulty at the time of modification, is set forth in the following table:


(In thousands)	Interest Only		Term Extension		Combination: Interest Only and Term Extension		Total		% of Total Class of Financing Receivable
Three months ended March 31, 2024


Residential Mortgage	$	—	$	—	$	92	$	92	0.01	%

Total	$	—	$	—	$	92	$	92	0.01	%









(In thousands)	Interest Only		Term Extension		Combination: Interest Only and Term Extension		Total		% of Total Class of Financing Receivable
Three months ended March 31, 2023
Commercial real estate	$	51	$	—	$	180	$	231	0.04	%


Total	$	51	$	—	$	180	$	231	0.04	%

The financial effects of the interest-only loan modifications reduced the monthly payment amounts for the borrower and the term extensions in the table above added a weighted-average of 2.0 years to the life of the loans, which also reduced the monthly payment amounts for the borrowers.

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Note 5 - Deposits

Deposits consisted of the following as of March 31, 2024 and December 31, 2023:


(Dollars in thousands)	March 31, 2024		% of Total Deposits		December 31, 2023		% of Total Deposits
Noninterest-bearing demand deposits	$	807,861	18.4	%	$	801,312	18.4	%
Interest-bearing demand deposits	923,120		21.1	%	947,372		21.8	%
Money market	874,833		20.0	%	850,674		19.6	%
Savings	284,893		6.5	%	288,404		6.6	%
Total demand and savings	2,890,707		66.0	%	2,887,762		66.4	%
Time	1,488,398		34.0	%	1,458,450		33.6	%
Total deposits	$	4,379,105	100.0	%	$	4,346,212	100.0	%

Overdrafts	$	558	0.01	%	$	315	0.01	%

The scheduled maturities of time deposits at March 31, 2024 were as follows:


	Time Deposits
(In thousands)	Less than $250,000		$250,000 or more
Maturing in 2024	$	827,090	$	279,833
Maturing in 2025	238,921		66,846
Maturing in 2026	38,245		3,463
Maturing in 2027	17,642		1,194
Maturing in 2028	11,241		572
Maturing thereafter	3,059		292
	$	1,136,198	$	352,200

Mid Penn had $ 244.8 million in brokered certificates of deposits as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, Mid Penn had $ 91.1 million and $ 96.7 million of CDAR deposits, respectively.

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Note 6 - Derivative Financial Instruments

Mid Penn manages its exposure to certain interest rate risks through the use of derivatives; however, none are entered into for speculative purposes. In 2023, Mid Penn entered into outstanding derivative contracts designated as hedges. Mid Penn’s free-standing derivative financial instruments are required to be carried at their fair value on the Consolidated Balance Sheets.

Loan-level Interest Rate Swaps

Mid Penn enters into loan-level interest rate swaps with certain qualifying, creditworthy commercial loan customers to meet their interest rate risk management needs. Mid Penn simultaneously enters into parallel interest rate swaps with dealer counterparties, with identical notional amounts and terms. The net result of the offsetting customer and dealer counterparty swap agreements is that the customer pays a fixed rate of interest and Mid Penn receives a floating rate. Mid Penn’s loan-level interest rate swaps are considered derivatives but are not accounted for using hedge accounting.

Information related to loan level swaps is set forth in the following table:


	March 31, 2024	December 31, 2023
		(Dollars in thousands)
Interest rate swaps on loans with customers
Notional amount		$	201,405		$	187,192
Weighted average remaining term (years)		5.92			6.24
Receive fixed rate (weighted average)		4.56		%	4.59		%
Pay variable rate (weighted average)		7.48		%	7.50		%
Estimated fair value (1)		$	11,315		$	10,484


		March 31, 2024			December 31, 2023
		(Dollars in thousands)
Interest rate swaps on loans with correspondents
Notional amount		$	201,405		$	187,192
Weighted average remaining term (years)		5.92			6.24
Receive variable rate (weighted average)		4.56		%	7.50		%
Pay fixed rate (weighted average)		7.48		%	4.59		%
Estimated fair value		$	11,315		$	10,484

(1) The net amount of the estimated fair value is disclosed in Other Liabilities on the Consolidated Balance Sheet.

Cash Flow Hedges of Interest Rate Risk

Mid Penn’s objectives in using interest rate derivatives are to reduce volatility in net interest income and to manage its exposure to interest rate movements. To accomplish this objective, Mid Penn primarily uses interest rate swaps as part of its interest rate risk management strategy.

Information related to cash flow hedges is set forth in the following table:


	March 31, 2024	December 31, 2023
		(Dollars in thousands)
Cash flow hedges
Notional amount		$	190,000		$	190,000
Weighted average remaining term (years)		1.97			2.22
Pay fixed rate (weighted average)		3.74		%	3.74		%
Receive variable rate (weighted average)		4.07		%	4.07		%
Estimated fair value		$	3,228		$	1,460

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For derivatives designated and that qualify as cash flow hedges of interest rate risk, the unrealized gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest income in the same period during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income as interest payments are made on Mid Penn’s variable-rate liabilities. During the next twelve months, Mid Penn estimates that an additional $ 2.2 million will be reclassified as a decrease to interest expense.

Note 7 - Accumulated Other Comprehensive (Loss) Income

The changes in each component of accumulated other comprehensive loss, net of taxes, are as follows:


(I n thousands )	Unrealized Loss on Securities		Unrealized Holding Losses on Interest Rate Derivatives used in Cash Flow Hedges		Defined Benefit Plans		Total
Balance at December 31, 2023	$	( 17,339 )	$	820	$	( 118 )	$	( 16,637 )
OCI before reclassifications	( 1,711 )		1,410		8		( 293 )
Amounts reclassified from AOCI	—		—		( 17 )		( 17 )
Balance at March 31, 2024	$	( 19,050 )	$	2,230	$	( 127 )	( 16,947 )






Balance at December 31, 2022	$	( 19,327 )	$	—	$	111	$	( 19,216 )
OCI before reclassifications	1,977		( 128 )		5		1,854
Amounts reclassified from AOCI	—		—		( 12 )		( 12 )
Balance at March 31, 2023	$	( 17,350 )	$	( 128 )	$	104	$	( 17,374 )

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MID PENN BANCORP, INC.

Note 8 - Fair Value Measurement

The Corporation uses estimates of fair value in applying various accounting standards for its consolidated financial statements on either a recurring or non-recurring basis. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. Mid Penn groups its assets and liabilities measured at fair value in three hierarchy levels, based on the observability and transparency of the inputs. The fair value hierarchy is as follows:

Level 1 - Inputs that represent quoted prices for identical instruments in active markets.

Level 2 - Inputs that represent quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 - Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

There were no transfers of assets between fair value Level 1 and Level 2 during the three months ended March 31, 2024 or the year ended December 31, 2023.

The following tables illustrate the assets measured at fair value on a recurring basis and reported on the Consolidated Balance Sheets.


	March 31, 2024
(In thousands)	Level 1		Level 2		Level 3		Total
Available-for-sale securities:
U.S. Treasury and U.S. government agencies	$	—	$	35,490	$	—	$	35,490
Mortgage-backed U.S. government agencies	—		146,765		—		146,765
State and political subdivision obligations	—		3,633		—		3,633
Corporate debt securities	—		31,744		—		31,744
Equity securities	431		—		—		431
Loans held for sale	—		4,581		—		4,581
Other assets:
Derivative assets	—		14,543		—		14,543
Total	$	431	$	236,756	$	—	$	237,187


	December 31, 2023
(In thousands)	Level 1		Level 2		Level 3		Total
Available-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 subdivision obligations	—		3,646		—		3,646
Corporate debt securities	—		31,577		—		31,577
Equity securities	438		—		—		438
Loans held for sale	—		3,855		—		3,855
Other assets:
Derivative assets	—		11,944		—		11,944
Total	$	438	$	239,354	$	—	$	239,792

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MID PENN BANCORP, INC.

The valuation methodologies and assumptions used to estimate the fair value for the items in the preceding tables are as follows:

Available for sale investment securities - The fair value of equity and debt securities classified as available for sale is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2), which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather, relying on the securities’ relationship to other benchmark quoted prices.

Equity securities - The fair value of equity securities with readily determinable fair values is recorded on the Consolidated Balance Sheet, with realized and unrealized gains and losses reported in other expense on the Consolidated Statements of Income.

Loans held for sale - This category includes mortgage loans held for sale that are measured at fair value. Fair values as of March 31, 2024 were measured as the price that secondary market investors were offering for loans with similar characteristics.

Derivative assets - Interest rate swaps are measured by alternative pricing sources with reasonable levels of price transparency in markets that are not active. Based on the complex nature of interest rate swap agreements, the markets these instruments trade in are not as efficient and are less liquid than that of the more mature Level 1 markets. These markets do, however, have comparable, observable inputs in which an alternative pricing source values these assets in order to arrive at a fair market value. These characteristics classify interest rate swap agreements as Level 2.

Mortgage banking derivatives represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors and the fair value of interest rate swaps. The fair values of Mid Penn’s interest rate locks, forward commitments and interest rate swaps represent the amounts that would be required to settle the derivative financial instruments at the balance sheet date. These characteristics classify interest rate swap agreements as Level 2. See "Note 5 - Derivative Financial Instruments," for additional information.

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. The following table illustrates Level 3 financial instruments measured at fair value on a nonrecurring basis:



(In thousands)	March 31, 2024		December 31, 2023
Individually evaluated loans, net of ACL	$	9,272	$	13,399
Foreclosed assets held for sale	5,110		293

Net loans - This category consists of loans that were individually evaluated for credit losses, net of the related ACL, and have been classified as Level 3 assets. For 2023, the amount shown is the balance of individually evaluated loans reporting a specific allocation or that have been partially charged-off. All of these loans are considered collateral-dependent; therefore, all of Mid Penn’s impaired loans, whether reporting a specific allowance allocation or not, are considered collateral- dependent. Mid Penn utilized Level 3 inputs such as independent appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable. Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses.

Foreclosed assets held for sale - Values are based on appraisals that consider the sales prices of property in the proximate vicinity.

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The following tables summarize the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn's financial instruments as of the periods presented:


	March 31, 2024
	Carrying Amount		Estimated Fair Value
(In thousands)			Level 1		Level 2		Level 3		Total
Financial instruments - assets
Cash and cash equivalents	$	68,085	$	68,085	$	—	$	—	$	68,085
Available-for-sale investment securities	217,632		—		217,632		—		217,632
Held-to-maturity investment securities	396,998		—		351,204		—		351,204
Equity securities	431		431		—		—		431
Loans held for sale	4,581		—		4,581		—		4,581
Net loans	4,283,925		—		—		4,285,266		4,285,266
Restricted investment in bank stocks	17,446		17,446		—		—		17,446
Accrued interest receivable	26,975		26,975		—		—		26,975
Derivative assets	14,543		—		14,543		—		14,543
Financial instruments - liabilities
Deposits	$	4,379,105	$	—	$	4,368,088	$	—	$	4,368,088
Short-term borrowings	271,849		—		271,849		—		271,849
Long-term debt (1)	20,768		—		20,768		—		20,768
Subordinated debt	46,201		—		40,332		—		40,332
Accrued interest payable	16,330		16,330		—		—		16,330
Derivative liabilities	11,315		—		11,315		—		11,315

(1) Long-term debt excludes finance lease obligations.


	December 31, 2023
			Estimated Fair Value
(In thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total
Financial instruments - assets
Cash and cash equivalents	$	96,763	$	96,763	$	—	$	—	$	96,763
Available-for-sale investment securities	223,555		—		223,555		—		223,555
Held-to-maturity investment securities	399,128		—		357,521		—		357,521
Equity securities	438		438		—		—		438
Loans held for 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
Accrued interest receivable	25,820		25,820		—		—		25,820
Derivative assets	11,944		—		11,944		—		11,944
Financial instruments - liabilities
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
Subordinated debt	46,354		—		39,515		—		39,515
Accrued interest payable	14,257		14,257		—		—		14,257
Derivative liabilities	10,484		—		10,484		—		10,484

(1) Long-term debt excludes finance lease obligations.

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The Bank’s outstanding and unfunded credit commitments and financial standby letters of credit were deemed to have no significant fair value as of March 31, 2024 and December 31, 2023.

Note 9 - Commitments and Contingencies

Guarantees and commitments to extend credit

Mid Penn is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. The commitments include various guarantees and commitments to extend credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Mid Penn evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the customer. Standby letters of credit and financial guarantees written are conditional commitments to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Mid Penn had $ 61.4 million and $ 62.2 million of standby letters of credit outstanding as of March 31, 2024 and December 31, 2023, respectively. Mid Penn does not anticipate any losses because of these transactions. The amount of the liability as of March 31, 2024 and December 31, 2023 for payment under standby letters of credit issued was not considered material.

Mid Penn adopted FASB ASC Topic 326, effective January 1, 2023, which requires Mid Penn to estimate expected credit losses for OBS credit exposures which are not unconditionally cancellable. Mid Penn maintains a separate ACL on OBS credit exposures, including unfunded loan commitments and letters of credit, which is included in other liabilities on the accompanying Consolidated Balance Sheets.

The ACL - OBS is adjusted as a provision for OBS commitments in provision for credit losses. The estimate includes consideration of the likelihood that funding will occur, an estimate of exposure at default that is derived from utilization rate assumptions using a non-modeled approach, and PD and LGD estimates that are derived from the same models and approaches for Mid Penn's other loan portfolio segments described in "Note 4 - Loans and Allowance for Credit Losses - Loans" above, as these unfunded commitments share similar risk characteristics with these loan portfolio segments.

The ACL - OBS at March 31, 2024 was $ 3.2 million compared to $ 3.6 million at December 31, 2023. 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 effect adjustment. A benefit for OBS credit losses of $ 318 thousand was recorded for the three months ended March 31, 2024.

Litigation

Mid Penn is subject to lawsuits and claims arising out of its normal conduct of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material adverse effect on the consolidated financial condition of Mid Penn.

Note 10 - Debt

Short-term FHLB and Correspondent Bank Borrowings

Total short-term borrowings were $ 271.8 million and $ 241.5 million as of March 31, 2024 and December 31, 2023, respectively. Short-term borrowings generally consist of federal funds purchased and advances from the FHLB with an original maturity of less than a year. Federal funds purchased from correspondent banks mature in one business day and reprice daily based on the Federal Funds rate. Advances from the FHLB are collateralized by the Bank’s investment in the common stock of the FHLB and by a blanket lien on selected loan receivables comprised principally of real estate secured loans within the Bank’s portfolio totaling $ 3.0 billion at March 31, 2024. The Bank had a short-term borrowing capacity from the FHLB as of March 31, 2024 up to the Bank’s unused borrowing capacity of $ 1.7 billion (equal to $ 2.1 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 March 31, 2024. No draws were made on these lines as of March 31, 2024 and December 31, 2023.

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Long-term Debt

The following table presents a summary of long-term debt as of March 31, 2024 and December 31, 2023.


(Dollars in thousands)	March 31, 2024		December 31, 2023
FHLB fixed rate instruments:
Due January 2024, 1.10 %	$	—	$	10,000
Due March 2024, 5.60 %	—		25,000
Due February 2026, 4.51 %	20,000		20,000
Due August 2026, 4.80 %	746		782
Due February 2027, 6.71 %	22		24
Total FHLB fixed rate instruments	20,768		55,806
Lease obligations included in long-term debt	3,173		3,197
Total long-term debt	$	23,941	$	59,003

As a member of the FHLB, the Bank can access a number of credit products which are utilized to provide liquidity. The FHLB fixed rate instruments obtained by the Bank are secured under the terms of a blanket collateral agreement with the FHLB consisting of FHLB stock and qualifying Bank loan receivables, principally real estate secured loans. The Bank 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 as a legally allowable alternative to investment pledging. These FHLB letter of credit commitments totaled $ 142.9 million and $ 153.5 million as of March 31, 2024 and December 31, 2023, respectively.

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Note 11 - Subordinated Debt and Trust Preferred Securities

Subordinated Debt Assumed November 2021 with the Riverview Acquisition

On November 30, 2021, Mid Penn completed its acquisition of Riverview and assumed $ 25.0 million of subordinated notes (the "Riverview Notes"). In accordance with purchase accounting principles, the Riverview Notes were assigned a fair value premium of $ 2.3 million. The notes are treated as Tier 2 capital for regulatory reporting purposes.

The Riverview Notes were entered into by Riverview on October 6, 2020 with certain qualified institutional buyers and accredited institutional investors. The Riverview Notes have a maturity date of October 15, 2030 and initially bear interest, payable semi-annually, at a fixed annual rate of 5.75 % per annum until October 15, 2025. Commencing on that date, the interest rate applicable to the outstanding principal amount due will be reset quarterly to an interest rate per annum equal to the then current three-month SOFR plus 563 bps, payable quarterly until maturity. Mid Penn may redeem the Riverview Notes at par, in whole or in part, at its option, anytime beginning on October 15, 2025.

Subordinated Debt Issued December 2020

On December 22, 2020, Mid Penn entered into agreements for and sold, at 100 % of their principal amount, an aggregate of $ 12.2 million of its subordinated notes due December 2030 (the "December 2020 Notes") on a private placement basis to accredited investors. The December 2020 Notes are treated as Tier 2 capital for regulatory capital purposes.

The December 2020 Notes bear interest at a rate of 4.5 % per year for the first five years and then float at the Wall Street Journal’s Prime Rate, provided that the interest rate applicable to the outstanding principal balance during the period the December 2020 Notes are floating will at no time be less than 4.5 %. Interest is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, beginning on March 31, 2021. The December 2020 Notes will mature on December 31, 2030 and are redeemable, in whole or in part, without premium or penalty, on any interest payment date on or after December 31, 2025 and prior to December 31, 2030, subject to any required regulatory approvals. Additionally, if (i) all or any portion of the December 2020 Notes cease to be deemed Tier 2 Capital, (ii) interest on the December 2020 Notes fails to be deductible for United States federal income tax purposes, or (iii) Mid Penn will be considered an "investment company," Mid Penn may redeem the December 2020 Notes, in whole but not in part, by giving 10 days’ notice to the holders of the December 2020 Notes. In the event of a redemption described in the previous sentence, Mid Penn will redeem the December 2020 Notes at 100 % of the principal amount of the December 2020 Notes, plus accrued and unpaid interest thereon to but excluding the date of redemption.

Holders of the December 2020 Notes may not accelerate the maturity of the December 2020 Notes, except upon the bankruptcy, insolvency, liquidation, receivership or similar event of Mid Penn or Mid Penn Bank, its principal banking subsidiary. Related parties held $ 750 thousand of the December 2020 Notes as of March 31, 2024 and December 31, 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 its 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 was redeemed as Riverview was a holder of the March 2020 Notes. The balance of March 2020 Notes outstanding as of March 31, 2024 was $ 8.1 million. The March 2020 Notes are intended to be treated as Tier 2 capital for regulatory capital purposes.

The March 2020 Notes bear interest at a rate of 4.0 % per year for the first five years and then float at the Wall Street Journal’s Prime Rate, provided that the interest rate applicable to the outstanding principal balance during the period the March 2020 Notes are floating will at no time be less than 4.25 %. Interest is payable semi-annually in arrears on June 30 and December 30 of each year, beginning on June 30, 2020, for the first five years after issuance and will be payable quarterly in arrears thereafter on March 30, June 30, September 30 and December 30. 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 after 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 Capital, 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 accrued and unpaid interest thereon to but excluding the date of redemption.

Holders of the March 2020 Notes may not accelerate the maturity of the March 2020 Notes, except upon the bankruptcy, insolvency, liquidation, receivership or similar event of Mid Penn or Mid Penn Bank, its principal banking subsidiary. Related parties held $ 1.7 million of the March 2020 Notes as of March 31, 2024 and December 31, 2023.

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Note 12 - Common Stock and Earnings Per Share

Treasury Stock Repurchase Program

Mid Penn adopted a treasury stock repurchase program ("Program") initially effective 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 to $ 15.0 million of Mid Penn’s outstanding common stock. Under the Program, Mid Penn conducts repurchases of its common stock through open market transactions (which may be by means of a trading plan adopted under SEC Rule 10b5-1) or in privately negotiated transactions. Repurchases under the Program are made at the discretion of management and are subject to market conditions and other factors. There is no guarantee as to the exact number of shares that Mid Penn may repurchase. The Program is able to be modified, suspended or terminated at any time, at Mid Penn’s discretion, based upon a number of factors, including liquidity, market conditions, the availability of alternative investment opportunities and other factors Mid Penn deems appropriate. The Program does not obligate Mid Penn to repurchase any shares.

During the three months ended March 31, 2024, Mid Penn repurchased 15,500 shares of common stock at an average price of $ 20.81 . As of March 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 approximately $ 5.0 million remaining available for repurchase as of March 31, 2024.

Dividend Reinvestment Plan

Under Mid Penn’s amended and restated DRIP, 300,000 shares of Mid Penn’s authorized but unissued common stock are reserved for issuance. The DRIP also allows for voluntary cash payments, within specified limits, to be used for the purchase of additional shares.

Equity Incentive Plans

On May 9, 2023, shareholders approved the 2023 Stock Incentive Plan, which authorizes Mid Penn to grant incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, deferred stock units and performance shares. The 2023 Plan was established for employees and directors of Mid Penn and the Bank, selected by the Compensation Committee of the Board of Directors, to incentivize the further success of the Company, and replaces the 2014 Restricted Stock Plan. The aggregate number of shares of common stock of the Company available for issuance under the Plan is 350,000 shares .

As of March 31, 2024, a total of 217,514 restricted shares were granted under the 2014 Plan, of which 83,107 shares were unvested. The 2014 Plan shares granted and vested resulted in $ 302 thousand and $ 249 thousand in share-based compensation expense for the three months ended March 31, 2024 and 2023, respectively.

Share-based compensation expense relating to restricted stock is calculated using grant date fair value and is recognized on a straight-line basis over the vesting periods of the awards. Restricted shares granted to employees vest in equal amounts on the anniversary of the grant date over the vesting period and the expense is a component of salaries and benefits expense on the Consolidated Statement of Income. The employee grant vesting period is determined by the terms of each respective grant, with vesting periods generally between one and four years . Restricted shares granted to directors have a twelve-month vesting period, and the expense is a component of directors’ fees and benefits within the other expense line item on the Consolidated Statement of Income.

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The following data shows the amounts used in computing basic and diluted earnings per common share:


	Three Months Ended March 31,
(In thousands, except per share data)	2024		2023
Net income	$	12,133	$	11,227

Weighted average common shares outstanding (basic)	16,567,902		15,886,186
Effect of dilutive unvested restricted stock grants	45,471		44,935
Weighted average common shares outstanding (diluted)	16,613,373		15,931,121

Basic earnings per common share	$	0.73	$	0.71
Diluted earnings per common share	0.73		0.70

There were no antidilutive instruments at March 31, 2024 and 2023.

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ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management Discussion relates to the Corporation, a financial holding company incorporated in the Commonwealth of Pennsylvania, and its wholly owned subsidiaries. Management's Discussion should be read in conjunction with the consolidated financial statements and other financial information presented in this report.

Caution About Forward-Looking Statements

Forward-looking statements involve risks, uncertainties and assumptions. Although Mid Penn generally does not make forward-looking statements unless Mid Penn’s management believes its management has a reasonable basis for doing so, Mid Penn cannot guarantee the accuracy of any forward-looking statements. Actual results may differ materially from those expressed in any forward-looking statements due to a number of uncertainties and risks, including the risks described in this Quarterly Report on Form 10-Q, the 2023 Annual Report, and other unforeseen risks. You should not put undue reliance on any forward-looking statements. These statements speak only as of the date of this Quarterly Report on Form 10-Q, even if subsequently made available by us on Mid Penn’s website or otherwise, and Mid Penn undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.

Certain of the matters discussed in this document and in documents incorporated by reference herein, including matters discussed under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations", may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Mid Penn or the Bank to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words "expect", "anticipates", "intend", "plan", "believe", "estimate", and similar expressions are intended to identify such forward-looking statements. Mid Penn’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:

• the effects of future economic conditions on Mid Penn, its bank and nonbank subsidiaries, and their markets and customers;

• governmental monetary and fiscal policies, as well as legislative and regulatory changes;

• future actions or inactions of the United States government, including a failure to increase the government debt limit or a prolonged shutdown of the federal government;

• business or economic disruption from national or global epidemic or pandemic events;

• the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, the value of investment securities, and interest rate protection agreements;

• the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in Mid Penn’s market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;

• an increase in the Pennsylvania Bank Shares Tax to which Mid Penn Bank’s capital stock is currently subject, or imposition of any additional taxes on the capital stock of Mid Penn or Mid Penn Bank;

• impacts of the capital and liquidity requirements imposed by bank regulatory agencies;

• the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, Financial Accounting Standards Board, the SEC, and other accounting and reporting standard setters;

• the costs and effects of litigation and of unexpected or adverse outcomes in such litigation;

• technological changes;

• our ability to successfully implement business strategies, including our acquisition strategy;

• our ability to successfully expand our franchise, including acquisitions or establishing new offices at favorable prices;

• our ability to successfully integrate any banks, companies, offices, assets, liabilities, customers, systems and management personnel we acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames;

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• potential goodwill impairment charges, or future impairment charges and fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames;

• our ability to attract and retain qualified management and personnel;

• results of regulatory examination and supervision processes;

• the failure of assumptions underlying the establishment of reserves for loan losses, the assessment of potential impairment of investment securities, and estimations of values of collateral and various financial assets and liabilities;

• our ability to maintain compliance with the listing rules of NASDAQ;

• our ability to maintain the value and image of our brand and protect our intellectual property rights;

• volatility in the securities markets;

• disruptions due to flooding, severe weather, or other natural disasters or Acts of God;

• acts of war, terrorism, or global military conflict;

• supply chain disruption; and

• the factors described in Item 1A of the Corporation's 2023 Annual Report and subsequent filings with the SEC.

The above list of factors that may affect future performance is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with this understanding of inherent uncertainty. Additional information regarding these as well as other factors that could affect future financial results can be found in the sections entitled "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Corporation's 2023 Annual Report. The results of operations for interim periods are not necessarily indicative of operating results expected for the full year.

Overview

Mid Penn is a financial holding company, which generates the majority of its revenues through net interest income, or the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance sheet growth and maintaining or increasing the net interest margin, which is FTE net interest income as a percentage of average interest-earning assets. Mid Penn also generates revenue through fees earned on the various services and products offered to its customers and through gains on sales of assets, such as loans, investments and properties. Offsetting these revenue sources are provisions for credit losses, non-interest expenses and income taxes.

The following table presents a summary of Mid Penn's earnings and selected performance ratios:


	Three Months Ended March 31,
	2024			2023
Net Income	$	12,133		$	11,227
Diluted EPS	$	0.73		$	0.70
Dividends Declared	$	0.20		$	0.20
Return on average assets	0.92		%	1.01		%
Return on average equity	8.94		%	8.91		%
Net interest margin (1)	2.97		%	3.49		%
Non-performing assets to total assets	0.29		%	0.31		%
Net charge-off (recoveries) to average loans (annualized)	0.004		%	0.013		%

(1) Presented on a FTE basis using a 21% Federal tax rate and statutory interest expense disallowances. See also the "Net Interest Income" section.

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 Brunswick shareholders

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of $27.6 million, for total consideration of $45.7 million for all outstanding stock and the cancellation of options of Brunswick.

Summary of Financial Results

• Net Income Per Share - Mid Penn’s net income available to common shareholders ("earnings") for the three months ended March 31, 2024 was $12.1 million, or $0.73 per both common share basic and diluted, compared to earnings of $11.2 million, or $0.71 per both common share basic and diluted for the three months ended March 31, 2023.

◦ Net Interest Margin - For the first quarter of 2024, Mid Penn’s net interest margin was 2.97% versus 3.49% for the same period of 2023. The decrease is primarily driven by higher interest rates resulting from persistent inflation. The yield on interest-earning assets for the first quarter of 2024 increased 67 basis points from the same period of 2023. The rate on interest-bearing liabilities increased 143 basis points from the same period of 2023.

◦ Loan Growth - Total loans, net of une arned income, as of March 31, 2024 were $4.3 billion compared to $4.3 billion as of December 31, 2023, an increase of $64.7 million, or 1.5%. The growth was primarily driven by an increase in commercial real estate of $43.1 million. and an increase in construction loans of $31.8 million, offset by a decrease in residential mortgage loans of $6.6 million.

◦ Deposit Growth - Total deposits increased $32.9 million, or 0.8%, from $4.3 billion at December 31, 2023, to $4.4 billion at March 31, 2024. The growth was primarily driven by an increase of $29.9 million in time deposits, and a $6.5 million increase in non-interest bearing accounts, partially offset by a decrease in interest-bearing transaction accounts.

• Asset Quality - Mid Penn adopted CECL on January 1, 2023. Its ACL at March 31, 2024 was $33.5 million, or 0.78% of total loans, as compared to $34.2 million, or 0.80% of total loans at December 31, 2023.

◦ Net Charge-offs/Recoveries - Mid Penn had net charge-offs of $44 thousand and $113 thousand for the three months ended March 31, 2024 and 2023, respectively.

◦ Non-performing assets - Total non-performing assets were $15.5 million at March 31, 2024, an increase compared to non-performing assets of $14.5 million at December 31, 2023. The increase is primarily related to loans totaling $1.1 million attributable to one relationship placed on non-accrual. Delinquency as a percentage of total loans was 0.38% at March 31, 2024.

◦ Benefit/Provision for credit losses - loans - The benefit for credit losses - loans was $619 thousand for the three months ended March 31, 2024 compared to $490 thousand for the same period of 2023. The decrease in provision for the three months ended March 31, 2024, is primarily due to a decrease in loss factors across all portfolios. The benefit for credit losses on off-balance sheet credit exposures was $318 thousand for the three months ended March 31, 2024.

• Noninterest Income - Noninterest income totaled $5.8 million for the three months ended March 31, 2024 compared to $4.3 million for the three months ended March 31, 2023. The increase in noninterest income is primarily due to a $1.5 million increase in other miscellaneous noninterest income.

• Noninterest Expense - Noninterest expense totaled $28.5 million for the first quarter of 2024, an increase of $2.5 million, or 9.4%, compared to noninterest expense of $26.1 million for the same period of 2023. The increase was primarily the result of a $1.6 million increase in salaries and benefits expense, driven by the Brunswick acquisition, and a $605 thousand increase in FDIC charges due to increased assessment rates.

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• Liquidity - Current liquidity, including borrowing capacity, enhanced to nearly $1.69 billion or 142.7% of uninsured and uncollateralized deposits, or approximately 38.5% of total deposits.

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Critical Accounting Estimates

The 2023 Annual Report includes a summary of critical accounting estimates that Mid Penn considers to be most important to the presentation of its financial condition and results of operations, because they require management’s most difficult judgments as a result of the need to make estimates about the effects of matters that are inherently uncertain.

The following discussion is regarding the critical accounting estimates related to the application of CECL and business combinations.

Allowance for 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 current expected credit losses over the remaining expected life of the portfolio. Management's determination of the appropriateness of the reserve is based on continuously monitoring and evaluating the loan portfolio, 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 portfolio.

The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Mid Penn’s loan portfolio segments. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations. Determining the appropriateness of the allowance is complex and requires judgement by Management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.

Mid Penn estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Mid Penn uses a third-party software application to calculate the quantitative portion of the ACL using a methodology and assumptions specific to each loan pool. The qualitative portion of the allowance is based on general economic conditions and other internal and external factors affecting Mid Penn as a whole as well as specific loans. Factors considered include the following: lending process, concentrations of credit, and 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 reasonable and supportable forecasts. As such, the calculation of ACL is inherently subjective 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 information 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 portfolio, or changes in accounting guidance. In times of economic slowdown, either local, regional or national, the risk inherent in the loan portfolio 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 portfolio or in any of its components even though the credit quality of the overall portfolio may be improving.

For further 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 9 - Commitments and Contingencies" to the Consolidated Financial Statements. To the extent actual outcomes differ from management estimates, additional PCL may be required that would adversely impact earnings in future periods.

Goodwill

Our annual impairment test was conducted during the fourth quarter of 2023. Factors considered include actual earnings in relation to forecasted earnings, liquidity levels, changes in deposit balances, and credit quality, among others. No

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goodwill impairment has been recorded for 2023. Management will continue to monitor internal metrics and macroeconomic trends to determine if there is likelihood of goodwill impairment.

Business Combinations

Assets acquired and liabilities assumed in business combinations are measured at fair value as of the acquisition date. In many cases, determining the fair value of the assets acquired and liabilities assumed requires Mid Penn to estimate the timing and amount of cash flows expected to result from these assets and liabilities and to discount these cash flows at appropriate rates of interest, which require the utilization of significant estimates and judgment in accounting for the acquisition.

Results of Operations

Net Interest Income

Net interest income, Mid Penn’s primary source of revenue, is the amount by which interest income on loans and investments exceeds interest incurred on deposits and borrowings. The amount of net interest income is affected by changes in interest rates and changes in the volume and mix of interest-sensitive assets and liabilities. Net interest income is also shown on a taxable-equivalent basis in total. Income from tax-exempt assets, primarily loans to or securities issued by state and local governments, is adjusted by an amount equivalent to the federal income taxes which would have been paid if the income received on these assets was taxable at the statutory rate of 21% for the periods presented.

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The following table includes average balances, amounts, and yields of interest income and rates of expense, interest rate spread, and net interest margin for the periods presented:


	Average Balances, Income and Interest Rates
	For the Three Months Ended
	March 31, 2024						March 31, 2023
(Dollars in thousands)	Average Balance		Interest		Yield/ Rate		Average Balance		Interest		Yield/ Rate
ASSETS:
Interest Bearing Balances	$	39,999	$	403	4.05	%	$	5,761	$	53	3.73	%
Investment Securities:
Taxable	539,674		3,800		2.83	%	556,901		3,764		2.74	%
Tax-Exempt	76,013		376		1.99	%	79,250		389		2.52	%
Total Investment Securities	615,687		4,176		2.73	%	636,151		4,153		2.71	%

Federal Funds Sold	10,373		136		5.27	%	3,775		45		4.83	%
Loans	4,293,828		63,236		5.92	%	3,555,375		45,865		5.24	%
Restricted Investment in Bank Stocks	19,439		240		4.97	%	9,542		110		4.68	%
Total Interest-earning Assets	4,979,326		68,191		5.51	%	4,210,604		50,226		4.86	%

Cash and Due from Banks	38,264						51,444
Other Assets	302,090						258,821
Total Assets	$	5,319,680					$	4,520,869

LIABILITIES & SHAREHOLDERS' EQUITY:
Interest-bearing Demand	$	898,340	$	3,884	1.74	%	$	968,951	$	2,691	1.13	%
Money Market	876,242		5,968		2.74	%	940,286		4,084		1.76	%
Savings	287,765		72		0.10	%	330,773		54		0.07	%
Time	1,468,611		16,408		4.49	%	749,598		5,172		2.80	%
Total Interest-bearing Deposits	3,530,958		26,332		3.00	%	2,989,608		12,001		1.63	%

Short-term borrowings	316,025		4,446		5.66	%	121,898		1,490		4.96	%
Long-term debt	40,571		533		5.28	%	4,350		44		4.10	%
Subordinated debt and trust preferred securities	46,275		424		3.69	%	56,875		642		4.58	%
Total Interest-bearing Liabilities	3,933,829		31,735		3.24	%	3,172,731		14,177		1.81	%

Noninterest-bearing Demand	781,136						793,382
Other Liabilities	58,714						43,899
Shareholders' Equity	546,001						510,857
Total Liabilities & Shareholders' Equity	$	5,319,680					$	4,520,869

Net Interest Income			$	36,456					$	36,049
Taxable Equivalent Adjustment (1)			260						200
Net Interest Income (taxable-equivalent basis)			$	36,716					$	36,249

Total Yield on Earning Assets					5.51	%					4.86	%
Rate on Supporting Liabilities					3.24	%					1.81	%
Average Interest Spread					2.27	%					3.05	%
Net Interest Margin (1)					2.97	%					3.49	%

(1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances.

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The following table summarizes the changes in interest income and interest expense resulting from changes in average balances, volume, and changes in rates for the three months ended March 31, 2024 in comparison to the same period in 2023:


	Three months ended March 31, 2024 vs. March 31, 2023
	Increase (decrease)
(Dollars in thousands)	Volume		Rate		Net
INTEREST INCOME:
Interest Bearing Balances	$	318	$	32	$	350
Investment Securities:
Taxable	(117)		153		36
Tax-Exempt	(20)		7		(13)
Total Investment Securities	(137)		160		23

Federal Funds Sold	79		12		91
Loans	9,621		7,750		17,371
Restricted Investment Bank Stocks	115		15		130
Total Interest Income	9,996		7,969		17,965

INTEREST EXPENSE:
Interest Bearing Deposits:
Interest Bearing Demand	(198)		1,391		1,193
Money Market	(280)		2,164		1,884
Savings	(7)		25		18
Time	5,006		6,230		11,236
Total Interest-Bearing Deposits	4,521		9,810		14,331

Short-term Borrowings	2,394		562		2,956
Long-term Debt	369		120		489
Subordinated Debt	(121)		(97)		(218)
Total Interest Expense	7,163		10,395		17,558

NET INTEREST INCOME	$	2,833	$	(2,426)	$	407

For the three months ended March 31, 2024, net interest income was $36.5 million compared to net interest income of $36.0 million for the three months ended March 31, 2023. The tax-equivalent net interest margin for the three months ended March 31, 2024 was 2.97% compared to 3.49% for the first quarter of 2023, representing a 53 bp decrease compared to the same period in 2023, primarily driven by higher interest rates resulting from persistent inflation.

The yield on interest-earning assets increased to 5.51% for the quarter ended March 31, 2024, from 4.84% for the quarter ended March 31, 2023. These increases were due to assets continuing to reprice at higher rates during the first quarter of 2024. Increased yields on interest-earning assets were more than offset by increases in funding costs for the first quarter of 2024, with the overall cost of interest-bearing liabilities increasing to 3.24% during the first quarter of 2024, compared to 3.02% for the three months ended December 31, 2023, and 1.81% for the three months ended March 31, 2023.

Average investment securities decreased $20.5 million and the yield on those investment securities increased 2 bps during the first quarter of 2024 compared to the first quarter of 2023, reducing interest income due to volume by $137 thousand offset by increased rates contributing $160 thousand to interest income. Average loans increased $738.5 million, and the yield on those loans increased 68 bps, contributing $9.6 million and $7.8 million, respectively, to the increase in interest income.

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Interest expense increased $17.6 million during the first quarter of 2024 compared to the first quarter of 2023. The rate of interest-bearing liabilities increased from 1.81% for the first quarter of 2023 to 3.24% for the first quarter of 2024. The increase in the rate was primarily a result of a shift in the mix of deposits from demand, money market and savings to higher yielding time deposits. Mid Penn continued to offer higher rates over the comparable period to both retain and attract deposits. In addition, average short-term borrowings of $316.0 million were used to help fund loan growth, contributing $3.0 million to interest expense during the first quarter of 2024.

Although the effective interest rate impact on interest-earning assets and funding sources can be reasonably estimated at current interest rate levels, the interest-bearing product and pricing options selected by customers, and the future mix of the loan, investment, and deposit products in the Bank's portfolios, may significantly change the estimates used in Mid Penn’s asset and liability management and related interest rate risk simulation models. In addition, our net interest income may be impacted by further interest rate actions of the Federal Reserve’s FOMC.

Provision for Credit Losses - Loans

On January 1, 2023, Mid Penn adopted ASU 2016-13, Financial Instruments - Credit Losses (ASC Topic 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss methodology, and is referred to as CECL. The benefit for credit losses on loans was $619 thousand for the three months ended March 31, 2024 compared to a provision of $490 thousand for the three months ended March 31, 2023. The decrease is primarily due to a decrease in loss factors across all portfolios.

Noninterest Income

Noninterest income for the three months ended March 31, 2024 was $5.8 million and $4.3 million for the three months ended March 31, 2023. The following table and explanations that follow provide additional analysis of noninterest income.

Noninterest income and variance analysis:


	Three Months Ended March 31,
(Dollars in Thousands)	2024		2023		$ Variance		% Variance
Fiduciary and wealth management	$	1,132	$	1,236	$	(104)	(8.4	%)
ATM debit card interchange	945		1,056		(111)		(10.5)
Service charges on deposits	509		435		74		17.0
Mortgage banking	424		384		40		10.4
Mortgage hedging	—		20		(20)		(100.0)
Net gain on sales of SBA loans	107		—		107		100.0
Earnings from cash surrender value of life insurance	284		254		30		11.8

Other	2,436		940		1,496		159.1
Total	$	5,837	$	4,325	$	1,512	35.0	%

For the three months ended March 31, 2024, noninterest income totaled $5.8 million, an increase of $1.5 million, or 34.96%, compared to noninterest income of $4.3 million for the three months ended March 31, 2023. The increase in noninterest income is primarily due to a $1.5 million increase in other miscellaneous noninterest income.

Noninterest Expense

For the three months ended March 31, 2024, noninterest expense totaled $28.5 million, an increase of $2.5 million, or 9.4%, compared to noninterest expense of $26.1 million for the same period in 2023. The following table and explanations that follow provide additional analysis of noninterest expense:

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	Three Months Ended March 31,
(Dollars in Thousands)	2024		2023		$ Variance		% Variance
Salaries and employee benefits	$	15,462	$	13,844	$	1,618	11.7	%
Software licensing and utilization	2,120		1,946		174		8.9
Occupancy expense, net	1,982		1,886		96		5.1
Equipment expense	1,222		1,251		(29)		(2.3)
Shares tax	997		899		98		10.9
Legal and professional fees	998		800		198		24.8
ATM/card processing	534		493		41		8.3
Intangible amortization	428		344		84		24.4
FDIC Assessment	945		340		605		177.9
Gain on sale of foreclosed assets, net	—		—		—		N/M
Merger and acquisition expense	—		224		(224)		N/M
Post-acquisition restructuring expense	—		—		—		N/M
Other expenses	3,832		4,043		(211)		(5.2)
Total Noninterest Expense	$	28,520	$	26,070	$	2,450	9.4	%

For the three months ended March 31, 2024, noninterest expense totaled $28.5 million, an increase of $2.7 million, or 10.4%, compared to noninterest expense of $25.8 million for the three months ended March 31, 2023. The increase was primarily the result of a $1.6 million increase in salaries and benefits expense, driven by the Brunswick acquisition, and a $605 thousand increase in FDIC charges due to increased assessment rates.

Income Taxes

The provision for income taxes was $2.6 million for the three months ended March 31, 2024 compared to $2.6 million for the same period in 2023. The provision for income taxes for the three months ended March 31, 2024 reflects a combined Federal and State effective tax rate of 17.5% and 18.7%, for the three months ended March 31, 2024 and March 31, 2023, respectively. Generally, Mid Penn’s effective tax rate is below the federal statutory rate due to earnings on tax-exempt loans, investments, and earnings from the cash surrender value of life insurance, as well as the impact of federal income tax credits, including those awarded from Mid Penn’s low-income housing investments. The realization of Mid Penn’s deferred tax assets is dependent on future earnings. Mid Penn currently anticipates that future earnings will be adequate to fully realize the currently recorded deferred tax assets.

Financial Condition

Mid Penn’s total assets were $5.3 billion as of March 31, 2024, reflecting an increase of $39.6 million, or 0.7%, compared to total assets of $5.3 billion as of December 31, 2023. The increase was primarily driven by organic loan growth, offset by a reduction in cash and cash equivalents.

Investment Securities

Mid Penn’s investment portfolio is utilized primarily to support overall liquidity and interest rate risk management, to provide collateral supporting pledging requirements for public funds on deposit, and to generate additional interest income within reasonable risk parameters. Total investment securities as of March 31, 2024 were $614.6 million compared to $622.7 million as of December 31, 2023. Mid Penn does not intend to grow the investment portfolio beyond levels necessary to support pledging requirements.

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The following table presents the expected maturities of the investment portfolio and the weighted average yields (calculated based on historical cost):


	Maturing
(In Thousands)	One Year and Less				After One Year thru Five Years				After Five Years Thru Ten Years				After Ten Years
As of March 31, 2024	Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield		Amount		Weighted Average Yield
Available for sale securities, at fair value:
U.S. Treasury and U.S. government agencies	$	12,380	3.21	%	$	21,304	2.82	%	$	1,806	3.30	%	$	—	—	%
Mortgage-backed U.S. government agencies	—		—		—		—		5,421		2.53		141,344		3.01
State and political subdivision obligations	—		—		—		—		1,708		2.17		1,925		2.66
Corporate debt securities	—		—		11,515		4.68		20,229		4.41		—		—
	$	12,380	3.21	%	$	32,819	3.48	%	$	29,164	3.87	%	$	143,269	3.01	%
Held to maturity securities, at amortized cost:
U.S. Treasury and U.S. government agencies	$	6,000	3.68	%	$	84,981	1.91	%	$	153,358	2.10	%	$	1,500	2.45	%
Mortgage-backed U.S. government agencies	—		—		2,408		2.87		6,320		2.84		33,648		2.02
State and political subdivision obligations	7,047		2.44		34,461		2.50		22,716		2.20		19,094		2.59
Corporate debt securities	—		—		6,015		3.42		19,450		4.19		—		—
	$	13,047	3.01	%	$	127,865	2.16	%	$	201,844	2.34	%	$	54,242	2.23	%

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Loans, net of unearned interest

Total loans, net of unearned interest, as of March 31, 2024 were $4.3 billion compared to $4.3 billion as of December 31, 2023. The growth of $64.7 million, or 1.5%, since December 31, 2023 was the result of organic loan growth. Organic growth occurred primarily across the commercial real estate and commercial and industrial portfolios, offset by a decrease in residential mortgage loan portfolios.


	March 31, 2024				December 31, 2023				Change in Balance
(Dollars in thousands)	Balance		% of Total Loans		Balance		% of Total Loans		$		%
Commercial real estate
CRE Nonowner Occupied	$	1,174,774	27.2	%	$	1,149,553	27.0	%	$	25,221	2.2	%
CRE Owner Occupied	622,574		14.4		629,904		14.8		(7,330)		(1.2)
Multifamily	334,952		7.8		309,059		7.3		25,893		8.4
Farmland	212,018		4.9		212,690		5.0		(672)		(0.3)
Total Commercial Real Estate	2,344,318		54.3		2,301,206		54.1		43,112		1.9
Commercial and industrial	671,395		15.6		675,079		15.9		(3,684)		(0.5)
Construction
Residential Construction	103,861		2.4		92,843		2.2		11,018		11.9
Other Construction	383,428		8.9		362,624		8.5		20,804		5.7
Total Construction	487,289		11.3		455,467		10.7		31,822		7.0
Residential mortgage
1-4 Family 1st Lien	334,557		7.7		339,142		8.0		(4,585)		(1.4)
1-4 Family Rental	340,052		7.9		341,937		8.0		(1,885)		(0.6)
HELOC and Junior Liens	132,703		3.1		132,795		3.1		(92)		(0.1)
Total Residential Mortgage	807,312		18.7		813,874		19.1		(6,562)		(0.8)
Consumer	7,135		0.2		7,166		0.2		(31)		(0.4)
	$	4,317,449	100.0	%	$	4,252,792	100.0	%	$	64,657	1.5	%

The majority of the Bank's loan portfolio is to businesses and individuals located within the Bank's primary market area of the Pennsylvania counties of Berks, Blair, Bucks, Centre, Chester, Clearfield, Cumberland, Dauphin, Fayette, Huntingdon, Lancaster, Lehigh, Luzerne, Montgomery, Perry, Schuylkill and Westmoreland, along with Middlesex and Monmouth counties of New Jersey. Commercial real estate, construction, and land development loans are collateralized mainly by mortgages on the income-producing real estate or land involved. Commercial, industrial, and agricultural loans are primarily made to business entities and may be secured by business assets, including commercial real estate, or may be unsecured. Residential real estate loans are secured by liens on the residential property. Consumer loans include installment loans, lines of credit and home equity loans. The Bank has no significant concentration of credit to any one borrower. The Bank’s highest concentration of credit by loan type is in commercial real estate.

Credit risk is managed through portfolio diversification, underwriting policies and procedures, and loan monitoring practices. Lenders are provided with detailed underwriting policies for all types of credit risks accepted by the Bank and must obtain appropriate internal approvals for credit extensions. The Bank also maintains strict documentation requirements and robust credit quality assurance practices in order to identify credit portfolio weaknesses as early as possible, so any exposures that are discovered might be mitigated or potential losses reduced. The Bank generally secures its loans with real estate, with such collateral values dependent and subject to change based on real estate market conditions within its market area.

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The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value:


(Dollars in thousands)	March 31, 2024						December 31, 2023
Commercial Real Estate	Balance		% of portfolio		Weighted Average LTV (2)		Balance			% of portfolio		Weighted Average LTV (2)
Owner Occupied (1)	$	622,574	26.5	%	N/A		$	627,995		27.4	%	N/A
Farmland (1)	212,018		9.0		N/A		212,690			9.2		N/A
Multifamily	334,952		14.3		63.5		308,886			13.4		58.9
Non Owner Occupied
Retail	360,350		15.4		53.7		414,485			18.0		51.0
Office	275,693		11.8		63.9		301,810			13.1		64.4
Industrial	150,852		6.4		58.0		156,075			6.8		49.3
Hospitality	132,986		5.7		48.8		137,718			6.0		49.4
Flex	37,202		1.6		54.5		39,374			1.7		56.0
Mobile Home Park	20,260		0.9		66.7		21,298			0.9		68.4
Health Care	9,933		0.4		54.0		15,618			0.7		54.6
Other Property Types	187,498		8.0		55.5		65,257			2.8		43.2
Total Commercial Real Estate	$	2,344,318	100.0	%	58.2	%	$	2,301,206	2301206000000	100.0	%	55.4	%

(1) LTV not available for Owner Occupied and Farmland properties.

(2) Weighted average Loan to Value is calculated based on estimated current market values of the properties.

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MID PENN BANCORP, INC.

Maturity distribution by contractual maturity date and rate sensitivity information related to the loan portfolio is reflected in the table below:


(In Thousands)
As of March 31, 2024	One Year and Less		One to Five Years		Five to Fifteen Years		Over Fifteen Years		Total
Commercial real estate	$	80,175	$	541,173	$	920,317	$	802,653	$	2,344,318
Commercial and industrial	22,428		317,609		104,257		227,101		671,395
Construction	92,221		270,288		75,307		49,473		487,289
Residential mortgage	31,051		97,611		230,221		448,429		807,312
Consumer	1,390		1,840		1,449		2,456		7,135
Total loans held in portfolio	227,265		1,228,521		1,331,551		1,530,112		4,317,449
Predetermined (fixed) interest rates:
Commercial real estate	55,973		348,819		121,859		11,767		538,418
Commercial and industrial	18,864		220,699		36,589		11,691		287,843
Construction	44,332		71,170		26,889		831		143,222
Residential mortgage	18,876		80,929		91,209		139,783		330,797
Consumer	754		1,770		1,449		334		4,307
Total predetermined (fixed) interest rates	138,799		723,387		277,995		164,406		1,304,587
Floating interest rates:
Commercial real estate	24,201		192,354		798,458		790,886		1,805,899
Commercial and industrial	3,564		96,910		67,668		215,410		383,552
Construction	47,889		199,118		48,418		48,642		344,067
Residential mortgage	12,176		16,682		139,012		308,646		476,516
Consumer	636		70		—		2,122		2,828
Total floating interest rates	88,466		505,134		1,053,556		1,365,706		3,012,862
Total fixed and floating interest rates	$	227,265	$	1,228,521	$	1,331,551	$	1,530,112	$	4,317,449

Credit Quality, Credit Risk, and Allowance for Credit Losses

Mid Penn adopted FASB ASC Topic 326, in accordance with the amendments of FASB ASU 2016-13, effective January 1, 2023. The guidance in FASB ASC 326 replaces 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 reasonable and supportable information to determine credit losses. Mid Penn’s ACL methodology for loans is based upon guidance within FASB ASC Subtopic 326-20, "Financial Instruments – Credit Losses – Measured at Amortized Cost," as well as regulatory guidance from the FDIC, the Bank's primary federal regulator. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the loan portfolio is continuously monitored by management and is reflected within the ACL for loans. The ACL is an estimate of expected losses inherent within Mid Penn’s existing loan portfolio. The ACL is adjusted through the provision for credit losses and reduced by the charge off of loan amounts, net of recoveries.

The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Mid Penn’s loan portfolio segments. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history, delinquency status and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations. Determining the appropriateness of the allowance is complex and requires judgement by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the allowance and credit loss expense.

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For a complete description of Mid Penn’s ACL methodology and the quantitative and qualitative factors included in the calculation, please see "Note 4 – Loans and Allowance for Credit Losses – Loans" included in Part I. Item 1. – Financial Statements of this report.

Upon the adoption of FASB ASC Topic 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 deferred tax assets increased by $3.1 million.

Changes in the ACL are summarized as follows:


	Three Months Ended March 31,
(Dollars in thousands)	2024			2023
Balance, beginning of period	$	34,187		$	18,957

Impact of adopting CECL	—			11,931


Loans charged off during period	(50)			(150)
Recoveries of loans previously charged off	6			37
Net (charge-offs) recoveries	(44)			(113)

(Benefit)/Provision for credit losses	(619)			490
Balance, end of period	$	33,524		$	31,265

Ratio of net charge-offs (recoveries) to average loans outstanding (annualized)	0.004		%	0.013		%

Ratio of ACL - loans to net loans at end of period	0.78		%	0.87		%

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MID PENN BANCORP, INC.

The following table presents the change in nonperforming asset categories as of March 31, 2024, December 31, 2023, and March 31, 2023.


(Dollars in thousands)	March 31, 2024			December 31, 2023			March 31, 2023
Non-performing Assets:
Total non-performing loans	$	10,389		$	14,216		$	13,909

Foreclosed real estate	5,110			293			248
Total non-performing assets	15,499			14,509			14,157

Accruing loans 90 days or more past due	25			—			7
Total risk elements	$	15,524		$	14,509		$	14,164

Non-performing loans as a percentage of total loans outstanding	0.24		%	0.33		%	0.39		%

Non-performing assets as a percentage of total loans outstanding and foreclosed real estate	0.36		%	0.34		%	0.39		%

Ratio of ACL to non-performing loans	322.69		%	240.48		%	224.78		%

Total nonperforming assets were $15.5 million at March 31, 2024, an increase compared to nonperforming assets of $14.5 million at December 31, 2023. The increase during the first quarter of 2024 primarily related to loans totaling $1.1 million attributable to one relationship placed on non-accrual. Delinquency as a percentage of total loans was 0.38% at March 31, 2024.

Goodwill

Mid Penn evaluates goodwill annually for impairment unless events occur which indicate that impairment is possible, a triggering event. At March 31, 2024, Mid Penn had goodwill of $127.0 million and Mid Penn's stock continues to trade below book value. Management has not noted any factors either internally or externally which would indicate that a triggering event has occurred during the first quarter of 2024 warranting an additional impairment test. Factors considered include actual earnings in relation to forecasted earnings, liquidity levels, changes in deposit balances, and credit quality, among others. Management will continue to monitor internal metrics and macroeconomic trends to determine if there is likelihood of Goodwill impairment. Additionally, our annual impairment test will be conducted as of October 31, 2024.

Deposits

Total deposits increased $32.9 million, or 0.8%, from $4.3 billion on December 31, 2023, to $4.4 billion at March 31, 2024. The growth was primarily due to an increase of $29.9 million, or 2.1%, in time deposits, and a $6.5 million, or 0.8%, in non-interest bearing accounts, partially offset by decreases in interest-bearing transaction accounts.

As of March 31, 2024, uninsured deposits were approximately $1.2 billion compared to $1.2 billion as of December 31, 2023. The maturities of the uninsured time deposits as of March 31, 2024 were as follows:



(In thousands)	3/31/2024
Three months or less	$	157,317
Over three months to six months	53,268
Over six months to twelve months	110,342
Over twelve months	30,576
	$	351,503

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MID PENN BANCORP, INC.

Borrowings

Total short-term borrowings increased $30.3 million, or 12.6%, from December 31, 2023 in order to fund loan growth. Short term FHLB borrowings increased $125.0 million offset by a decrease in FHLB overnight borrowings of $94.7 million. Total long-term borrowings were $23.9 million at March 31, 2024, a decrease of $35.1 million from December 31, 2023.

Liquidity

Mid Penn’s objective is to maintain adequate liquidity to meet funding needs at a reasonable cost and to provide contingency plans to meet unanticipated funding needs or a loss of funding sources, while minimizing interest rate risk. Adequate liquidity provides resources for credit needs of borrowers, for depositor withdrawals, and for funding corporate operations. Sources of liquidity are as follows:

• a growing core deposit base;

• proceeds from the sale or maturity of investment securities;

• payments received on loans and mortgage-backed securities;

• overnight correspondent bank borrowings on various credit lines; and

• borrowing capacity available from the FHLB and the Federal Reserve Discount Window available to Mid Penn.

Mid Penn believes its core deposits are generally stable even in periods of changing interest rates. Liquidity is measured and monitored daily, allowing management to better understand and react to balance sheet trends. These measurements indicate that liquidity generally remains stable and exceeds our minimum defined levels of adequacy. Other than the trends of continued competitive pressures and volatile interest rates, and the uncertain impact of the current inflationary environment, there are no known demands, commitments, events, or uncertainties that will result in, or that are reasonably likely to result in, liquidity increasing or decreasing in any material way.

On at least a quarterly basis, a comprehensive liquidity analysis is reviewed by the Asset Liability Committee and Board of Directors. The analysis provides a summary of the current liquidity measurements, projections, and future liquidity positions given various levels of liquidity stress. Management also maintains a detailed Contingency Funding Plan designed to respond to overall stress in the financial condition of the banking industry or a prospective liquidity problem specific to Mid Penn.

The Consolidated Statements of Cash Flows provide additional information. Mid Penn’s operating activities during the three months ended March 31, 2024 provided $12.4 million of cash, mainly due to net income. Cash used in investing activities during the three months ended March 31, 2024 was $65.7 million, mainly the result of the net increase in loans. Cash provided by financing activities during the three months ended March 31, 2024 totaled $24.7 million, primarily the result of an increase in net deposits.

Regulatory Capital

Mid Penn and the Bank are subject to regulatory capital requirements administered by banking regulators. Failure to meet minimum capital requirements can trigger certain mandatory, and possibly additional discretionary, actions by the regulators that if, undertaken, could have a direct material effect on Mid Penn's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory account practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Minimum regulatory capital requirements established by Basel III rules require Mid Penn and the Bank to:

• Meet a minimum Common Equity Tier I capital ratio of 4.5% of risk-weighted assets;

• Meet a minimum Tier I capital ratio of 6.0% of risk-weighted assets;

• Meet a minimum Total capital ratio of 8.0% of risk-weighted assets;

• Meet a minimum Tier I leverage capital ratio of 4.0% of average assets;

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• Maintain a "capital conservation buffer" of 2.5% above the minimum risk-based capital requirements, which must be maintained to avoid restrictions on capital distributions and certain discretionary bonuses; and

• Comply with the definition of capital to improve the ability of regulatory capital instruments to absorb losses.

The Basel III Rules use a standardized approach for risk weightings that expands the risk-weighting for assets and off-balance sheet exposures from the previous 0%, 20%, 50% and 100% categories to a much larger and more risk-sensitive number of categories, depending on the nature of the assets and off-balance sheet exposures and resulting in higher risk weightings for a variety of asset categories.

Banks are evaluated for capital adequacy by regulatory supervisory agencies based on the ratio of capital to risk-weighted assets and total assets. The minimum capital to risk-weighted assets requirements, including the capital conservation buffers, which became effective for Mid Penn and the Bank on January 1, 2016, are illustrated below. At March 31, 2024, regulatory capital ratios for both Mid Penn and the Bank met the definition of a "well-capitalized" institution under the regulatory framework for prompt corrective action, and exceeded the minimum capital requirements under Basel III.

Mid Penn maintained the following regulatory capital ratios in comparison to regulatory requirements:


	March 31, 2024		December 31, 2023		Regulatory Minimum for Capital Adequacy		Fully Phased-In, with Capital Conversation Buffers
Total Risk-Based Capital (to Risk-Weighted Assets)	11.66	%	11.69	%	10.50	%	4.00	%
Tier I Risk-Based Capital (to Risk-Weighted Assets)	9.78		9.78		8.50		7.00
Common Equity Tier I (to Risk-Weighted Assets)	9.78		9.78		7.00		8.50
Tier I Leverage Capital (to Average Assets)	8.31		8.32		4.00		10.50

As of March 31, 2024 and December 31, 2023, Mid Penn and the Bank met all capital adequacy requirements and the Bank was considered "well-capitalized". However, future changes in regulations could increase capital requirements and may have an adverse effect on capital resources.

Shareholders' Equity

Shareholders' equity, or capital, is evaluated in relation to total assets and the risk associated with those assets, and the desire to collectively maintain and enhance shareholders’ value, and satisfactorily address regulatory capital requirements. Accordingly, capital management has been, and will continue to be, of paramount importance to Mid Penn.

Shareholders’ equity increased by $8.6 million, or 1.6%, from $542.4 million as of December 31, 2023 to $551.0 million as of March 31, 2024, primarily due to earnings of $12.1 million, partially offset by dividends declared of $3.3 million and stock repurchases of $323 thousand.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a financial institution, Mid Penn’s primary source of market risk is interest rate risk. Interest rate risk is the exposure to fluctuations in Mid Penn’s future earnings, earnings at risk, resulting from changes in interest rates. This exposure or sensitivity is a function of the repricing characteristics of Mid Penn's portfolio of assets and liabilities. Each asset and liability reprices either at maturity or during the life of the instrument. Interest rate sensitivity is measured as the difference between the volume of assets and liabilities that are subject to repricing in a future period of time.

The principal purpose of asset-liability management is to maximize current and future net interest income within acceptable levels of interest rate risk while satisfying liquidity and capital requirements. Net interest income is increased by increasing the net interest margin and by volume growth. Thus, the goal of interest rate risk management is to maintain a balance between risk and reward such that net interest income is maximized while risk is maintained at an acceptable level.

Mid Penn utilizes an asset-liability management model to measure the impact of interest rate movements on its interest rate sensitivity position. Mid Penn’s management also reviews the traditional maturity gap analysis regularly. Mid Penn does not always attempt to achieve an exact match between interest sensitive assets and liabilities because it believes that an actively managed amount of interest rate risk is inherent and appropriate in the management of Mid Penn’s profitability.

Modeling techniques and simulation analysis involve assumptions and estimates that inherently cannot be measured with complete precision. Key assumptions in the analyses include maturity and repricing characteristics of assets and liabilities, prepayments on amortizing assets, non-maturing deposit sensitivity, and loan and deposit pricing. These assumptions are inherently uncertain due to the timing, magnitude and frequency of rate changes and changes in market conditions and management strategies, among other factors. However, the analyses are useful in quantifying risk and provide a relative gauge of Mid Penn’s interest rate risk position over time.

Management reviews interest rate risk on a quarterly basis. This analysis includes earnings scenarios whereby interest rates are increased or decreased by 100, 200, 300 and 400 bps. These scenarios, detailed in the table below, indicate that Mid Penn would experience enhanced net interest income over a one-year time frame due to downward interest rate changes, while an increase in interest rates rates would result in a decline in net interest income over a one-year time frame; however, actual results could vary significantly from the calculations prepared by management. At March 31, 2024, all interest rate risk levels according to the model were within the tolerance limits of the Board-approved policy.


Change in Basis Points	% Change in Net Interest Income	Policy Risk Limit
400	(2.50)%	≥ -25%
300	(1.90)%	≥ -20%
200	(1.30)%	≥ -15%
100	(0.60)%	≥ -10%
(100)	0.90%	≥ -10%
(200)	1.40%	≥ -15%
(300)	1.50%	≥ -20%
(400)	2.20%	≥ -25%

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Mid Penn maintains controls and procedures designed to ensure that information required to be disclosed in the reports that Mid Penn files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures as of March 31, 2024, Mid Penn’s management, with the participation of the Principal Executive Officer and Principal Financial Officer, concluded that the disclosure controls and procedures were effective as of such date.

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MID PENN BANCORP, INC.

Changes in Internal Controls

There were no changes in Mid Penn’s internal control over financial reporting that have materially affected, or are reasonable likely to materially affect, Mid Penn’s internal control over financial reporting during the three months ended March 31, 2024.

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MID PENN BANCORP, INC.

PART II – OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

Based on information currently available, management is not aware of any litigation that would reasonably be expected to have a material adverse effect on the consolidated financial position of Mid Penn or its subsidiaries taken as a whole. There are no proceedings pending other than ordinary routine litigation occurring in the normal course of business. In addition, management does not know of any material proceedings contemplated by governmental authorities against Mid Penn or any of its properties.

ITEM 1A – RISK FACTORS

Management has reviewed the risk factors that were previously disclosed in the 2023 Annual Report and subsequent reports filed with the SEC to determine if there were material changes applicable to the three months ended March 31, 2024. There have been no material changes to such risk factors.

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MID PENN BANCORP, INC.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(1) None.

(2) None.

Mid Penn adopted a treasury stock repurchase program ("Program") initially effective 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 to $15.0 million of Mid Penn’s outstanding common stock. Under the Program, Mid Penn conducts repurchases of its common stock through open market transactions (which may be by means of a trading plan adopted under SEC Rule 10b5-1) or in privately negotiated transactions. Repurchases under the Program are made at the discretion of management and are subject to market conditions and other factors. There is no guarantee as to the exact number of shares that Mid Penn may repurchase. The Program is able to be modified, suspended or terminated at any time, at Mid Penn’s discretion, based upon a number of factors, including liquidity, market conditions, the availability of alternative investment opportunities and other factors Mid Penn deems appropriate. The Program does not obligate Mid Penn to repurchase any shares. During the three months ended March 31, 2024, Mid Penn repurchased 15,500 shares of common stock at an average price of $20.81. As of March 31, 2024, Mid Penn repurchased 440,722 shares of common stock under the program.

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MID PENN BANCORP, INC.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 – MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5 – OTHER INFORMATION

None

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MID PENN BANCORP, INC.

ITEM 6 – EXHIBITS


3.1						The Registrant’s Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Quarterly Report on form 10-Q with the SEC on May 9, 2023.)

3.2						The Registrant’s By-laws . (Incorporated by reference to Exhibit 3.1 to Registrant’s Annual Report on Form 10-K filed with the SEC on March 28, 2024.)

10.1						E mployment A greement among Mid Penn Bancorp, Inc, Mid Penn Bank and Jordan D. Space dated September 6, 2022 . (Filed herewith)

10.2						C hange in Control Agreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Jordan D. Space dated September 18 , 202 3 . (Filed herewith)

10.3						S upplemental Executive Retirement Plan Agreement between Mid Penn Bank and Jordan D. Space dated September 6, 2022. (Filed herewith)

31.1						Certification of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002.

32						Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted in inline XBRL and contained in Exhibit 101).

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MID PENN BANCORP, INC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Mid Penn Bancorp, Inc. (Registrant)

By:			/s/ Rory G. Ritrievi
			Rory G. Ritrievi President and CEO (Principal Executive Officer)

Date:			May 8, 2024

By:			/s/ Justin T. Webb
			Justin T. Webb Chief Financial Officer (Principal Financial Officer)

Date:			May 8, 2024

TABLE OF CONTENTS

Part 1 Financial Information Item 1 Financial Statements Note 1 - Summary Of Significant Accounting Policies Note 2 - Business Combination Note 3 - Investment Securities Note 4 - Loans and Allowance For Credit Losses - Loans Note 5 - Deposits Note 6 - Derivative Financial Instruments Note 7 - Accumulated Other Comprehensive (loss) Income Note 8 - Fair Value Measurement Note 9 - Commitments and Contingencies Note 10 - Debt Note 11 - Subordinated Debt and Trust Preferred Securities Note 12 - Common Stock and Earnings Per Share Item 2 Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3 Quantitative and Qualitative Disclosures About Market Risk Item 4 Controls and Procedures Part II Other Information Item 1 Legal Proceedings Item 1A Risk Factors Item 2 Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3 Defaults Upon Senior Securities Item 4 Mine Safety Disclosures Item 5 Other Information Item 6 Exhibits

Exhibits

3.1 The Registrants Articles of Incorporation.(Incorporated by reference to Exhibit 3.1 to Registrant's Quarterly Report on form 10-Q with the SEC on May 9, 2023.) 3.2 The Registrants By-laws. (Incorporated by reference to Exhibit 3.1 to Registrants Annual Report on Form 10-K filed with the SEC on March 28, 2024.) 10.1 EmploymentAgreement among Mid Penn Bancorp, Inc, Mid Penn Bank and Jordan D. Space dated September 6, 2022.(Filed herewith) 10.2 Change in ControlAgreement among Mid Penn Bancorp, Inc., Mid Penn Bank and Jordan D. Space dated September18, 2023.(Filed herewith) 10.3 Supplemental Executive Retirement Plan Agreement between Mid Penn Bank and Jordan D. Space dated September 6, 2022.(Filed herewith) 31.1 Certification of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002.

MPB 10-Q Quarter ended March 31, 2024

Exhibits