HARRISBURG, Pa.--(BUSINESS WIRE)--Mid Penn Bancorp, Inc. (NASDAQ: MPB) ("Mid Penn"), the parent company of Mid Penn Bank (the "Bank") and MPB Financial Services, LLC, today reported net income available to common shareholders ("earnings") of $21.6 million, or $0.85 per basic common share and $0.84 per diluted common share, for the quarter ended September 30, 2026, compared to $18.3 million, or $0.80 per basic and $0.79 per diluted common share, for the third quarter of 2025. Adjusted earnings per common share, excluding non-recurring income and expenses⁽¹⁾, was $0.88 for the third quarter of 2026. Adjustments exclude $1.3 million of non-recurring expense, and $789 thousand of non-recurring income. Mid Penn also declared a quarterly cash dividend of $0.23 per common share.

Key Highlights of the Third Quarter of 2026:

• Net income available to common shareholders for the third quarter of 2026 was $21.6 million, an increase of $3.3 million, or 18.2%, compared to the third quarter of 2025, and a decrease of $66 thousand, or 0.3%, compared to the second quarter of 2026. The year-over-year increase was primarily attributable to the William Penn and 1st Colonial acquisitions. Earnings per basic common share for the third quarter of 2026 were $0.85 and $0.84 per diluted common share, an increase from $0.80 per basic and $0.79 per diluted common share in the third quarter of 2025.
  
  
• Loan balances increased $19.3 million, or 1.4% (annualized), during the third quarter of 2026 compared to the second quarter of 2026. Total loans increased $815.3 million, or 16.9%, to $5.6 billion at September 30, 2026, compared to $4.8 billion at September 30, 2025. Excluding $597.5 million of loans acquired in the 1st Colonial acquisition, organic loan growth was $176.2 million, or 4.84% (annualized), from December 31, 2025.
  
  
• Deposits increased $141.8 million, or 9.4% (annualized), during the third quarter of 2026 compared to the second quarter of 2026, primarily driven by a $251.8 million increase in interest-bearing transaction accounts, offset by a $59.9 million decrease in time deposits and a $50.1 million decrease in noninterest-bearing deposits. Total deposits increased $752.3 million, or 14.1%, to $6.1 billion from September 30, 2025. Excluding $747.1 million of deposits from the 1st Colonial acquisition, organic deposits increased $133.3 million, or 3.4% (annualized), from December 31, 2025.
  
  
• Net interest margin decreased 14 basis points ("bps") to 3.92% for the quarter ended September 30, 2026, compared to 4.06% for the second quarter of 2026, primarily driven by lower loan yields resulting from a $1.0 million decrease in purchase accounting accretion income, as well as higher funding costs, partially offset by higher investment securities yields. Compared to the third quarter of 2025, net interest margin increased 32 bps from 3.60%, primarily driven by higher investment securities yields, and lower funding costs.
  
  
• The core efficiency ratio⁽¹⁾ remained relatively stable at 60.57% in the third quarter of 2026, compared to 59.82% in the second quarter of 2026, and 58.80% in the third quarter of 2025, reflecting continued expense discipline following the 1st Colonial and William Penn acquisitions. On a tax-effected basis, the core efficiency ratio was 60.38%, compared to 59.64% and 58.57%, respectively.
  
  
• During the third quarter of 2026, Mid Penn closed certain financial centers as part of its ongoing efforts to improve operating efficiency. The closures are expected to result in ongoing expense savings, with an anticipated earnback period of less than one year.
  
  
• Book value per common share was unchanged at $35.62 as of September 30, 2026, compared to $35.62 as of June 30, 2026, and increased from $34.56 as of September 30, 2025. Tangible book value per common share ⁽¹⁾ was $28.26 as of September 30, 2026, compared to $28.18 and $27.96 as of June 30, 2026 and September 30, 2025, respectively.
  
  
• As a result of the foregoing, the Board of Directors declared a quarterly cash dividend of $0.23 per common share, payable on November 13, 2026, to shareholders of record as of November 2, 2026.

Chair, President and CEO Rory G. Ritrievi provided the following statement:

“The third quarter of 2026 was a solid quarter for Mid Penn. Strong deposit growth was partially offset by softer-than-expected loan growth and noninterest income generation. Effective expense management and continued strong asset quality helped keep overall results in line with our expectations.

As we enter the fourth quarter, we remain confident that both loan growth and noninterest income performance will improve, positioning us well through the end of 2026 and for continued success in 2027.

Based upon the overall financial success in the third quarter and year to date, we are pleased to declare a quarterly cash dividend of $0.23 per common share to our shareholders of record as of November 2, 2026."

Net Interest Income

For the three months ended September 30, 2026, net interest income was $64.6 million, compared to net interest income of $65.3 million for the three months ended June 30, 2026, and $53.6 million for the three months ended September 30, 2025. Interest income for the quarter ended September 30, 2026 includes $3.1 million of loan accretion income related to fair value marks on acquired loans, which are accreted into interest income over the expected life of the assets.

The tax-equivalent net interest margin⁽¹⁾ for the three months ended September 30, 2026 was 3.92% compared to 4.06% for the second quarter of 2026, and 3.60% for the third quarter of 2025. The 14 bp decrease from the linked-quarter was partially attributable to the overall impact of purchase accounting adjustments, which contributed approximately 8 bps of the decline. The remaining decrease was primarily attributable to higher funding costs, partially offset by higher investment securities yields. Compared to the third quarter of 2025, net interest margin increased 32 bps from 3.60%, primarily driven by higher investment securities yields, and lower funding costs.

The yield on interest-earning assets decreased to 5.89% for the quarter ended September 30, 2026, from 5.99%, and increased from 5.81%, for the three months ended June 30, 2026, and September 30, 2025, respectively. The decrease from the second quarter of 2026 reflected lower yields on loans including the impact of reduced purchase accounting accretion income, partially offset by higher yields on investment securities.

For the nine months ended September 30, 2026, net interest income increased 28.3% to $185.2 million compared to net interest income of $144.3 million for the same period of 2025. The increase was primarily driven by a $38.8 million increase in interest income on loans and a $6.4 million increase in interest income on investment securities, compared to the same period in 2025.

Average Balances

Average balances continue to be impacted by the 1st Colonial acquisition given that the acquisition closed on February 27, 2026. Day one increases in loans, total assets, deposits, and total liabilities were $581.8 million, $842.5 million, $746.9 million and $751.7 million, respectively.

Average loans increased $35.9 million to $5.6 billion for the quarter ended September 30, 2026, compared to $5.6 billion for the quarter ended June 30, 2026, and increased $819.8 million compared to $4.8 billion for the quarter ended September 30, 2025.

Average deposits were $6.0 billion for the third quarter of 2026, an increase of $84.3 million, or 1.4%, from $5.9 billion in the second quarter of 2026 and an increase of $555.7 million, or 10.2%, from $5.5 billion for the third quarter of 2025, primarily due to the 1st Colonial and William Penn acquisitions, and organic growth. The average cost of deposits was 2.11% for the third quarter of 2026, representing a 4 bp increase from the second quarter of 2026, and a 26 bp decrease from the third quarter of 2025.

Cost of funds increased to 2.14%, compared to 2.09% in the second quarter of 2026, primarily reflecting higher costs on interest-bearing deposits.

Asset Quality

The total benefit for credit losses, including the benefit for credit losses on off-balance sheet credit exposures, was $1.6 million for the three months ended September 30, 2026, compared to the provision for credit losses of $528 thousand for the three months ended June 30, 2026, and a benefit for credit losses of $434 thousand for the three months ended September 30, 2025. The quarter-over-quarter change in the benefit for credit losses was primarily driven by improved macroeconomic assumptions, including more favorable forecasts for both unemployment and GDP, as well as an increase in loan prepayment speeds, partially offset by an increase in reserve on three individually analyzed C&I loans. Credit quality remained stable during the quarter, supported by minimal net charge-offs and continued disciplined credit risk management. Net charge-offs for the three months ended September 30, 2026, were $78 thousand, or approximately 0.001% of total average loans.

The provision for credit losses on loans was $887 thousand for the nine months ended September 30, 2026, a decrease of $1.5 million compared to the provision for credit losses of $2.4 million for the nine months ended September 30, 2025. The decrease for the nine months ended September 30, 2026 was primarily attributable to improved macroeconomic assumptions, partially offset by increases from qualitative adjustments to several segments of the portfolio. The benefit for credit losses on off-balance sheet credit exposures was $243 thousand for the three months ended September 30, 2026, compared to the benefit of $247 thousand for the three months ended September 30, 2025. The benefit for credit losses on off-balance sheet credit exposures was $326 thousand for the nine months ended September 30, 2026, compared to the benefit of $243 thousand for the nine months ended September 30, 2025.

Allowance for credit losses on loans was 0.71%, 0.74%, and 0.77% of loans, net of unearned income at September 30, 2026, June 30, 2026, and September 30, 2025, respectively.

Total nonperforming assets were $47.0 million at September 30, 2026, compared to nonperforming assets of $36.8 million at June 30, 2026, and $27.3 million at September 30, 2025. The increase during the third quarter of 2026 was primarily driven by an $8.2 million increase in nonaccrual loans, including $7.0 million in commercial real estate loans, and a $1.9 million increase in foreclosed owner-occupied commercial real estate.

Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.73% at September 30, 2026, compared to 0.71% and 0.68% at June 30, 2026 and September 30, 2025, respectively.

Capital

Shareholders’ equity increased $732 thousand, or 0.1%, to $902.6 million as of September 30, 2026, from $901.9 million as of June 30, 2026. Retained earnings increased $15.8 million, or 6.6%, from $238.2 million as of June 30, 2026 to $254.0 million as of September 30, 2026. Regulatory capital ratios for Mid Penn and the Bank indicate regulatory capital levels in excess of the regulatory minimums and the levels necessary for the Bank to be considered "well capitalized" at September 30, 2026. Additionally, Mid Penn declared $5.8 million in dividends during the third quarter of 2026.

On April 21, 2026, Mid Penn’s Board of Directors authorized a renewal and increase to its treasury stock repurchase program ("the Program"), increasing the authorized repurchase amount to an additional $50.0 million of Mid Penn’s outstanding common stock through April 30, 2027. No shares were repurchased during the third quarter of 2026. As of September 30, 2026, Mid Penn repurchased a total of 595,891 shares of common stock at an average price of $24.82 per share under the Program.

Noninterest Income

For the three months ended September 30, 2026, noninterest income totaled $10.0 million, a decrease of $548 thousand, or 5.2%, from $10.6 million for the second quarter of 2026. The decrease was primarily driven by a $225 thousand decrease in earnings from the cash surrender value of life insurance, and a $437 thousand decrease in other noninterest income, including a $406 thousand decrease in loan-level swap fees. These decreases were partially offset by a $415 thousand increase from the release of a contingent liability generated from a previous acquisition, and a $332 thousand increase from acquisition related lease adjustments. Additionally, there was a $537 thousand increase in loss on disposal of fixed assets.

For the nine months ended September 30, 2026, noninterest income totaled $30.2 million, an increase of $10.7 million, or 54.5%, compared to noninterest income of $19.6 million for the nine months ended September 30, 2025. The increase was primarily driven by a $7.6 million increase in fiduciary and wealth management income, reflecting the Cumberland Advisors acquisition, a $1.2 million increase in earnings from the cash surrender value of life insurance, a $485 thousand increase on ATM debit card interchange fees, and a $645 thousand increase in other noninterest income, including a $680 thousand increase in insurance commissions.

Noninterest Expense

For the three months ended September 30, 2026, noninterest expense totaled $48.6 million, an increase of $823 thousand, or 1.7%, compared to $47.8 million in the second quarter of 2026. The increase was primarily driven by a $436 thousand increase in the write-down on other real estate owned property, and an $809 thousand increase in other noninterest expense, including a $687 thousand increase in expenses relate to branch optimization. These increases were partially offset by a $446 thousand decrease in salaries and employee benefits.

For the nine months ended September 30, 2026, noninterest expense totaled $148.3 million, an increase of $31.9 million, or 27.4%, compared to $116.4 million for the nine months ended September 30, 2025. The increase was primarily driven by a $18.8 million increase in salaries and benefits, reflecting additional staff from the 1st Colonial, Cumberland Advisors, and William Penn acquisitions. Software licensing and utilization costs, occupancy expenses, and legal and professional fees increased $2.8 million, $1.8 million, and $2.7 million, respectively, primarily reflecting Mid Penn's increased size and operational complexity following these acquisitions. Intangible amortization also increased $2.7 million. These increases were partially offset by a $3.7 million decrease in merger and acquisition expenses compared to the same period of 2025.

The core efficiency ratio⁽¹⁾ remained relatively stable at 60.57% for the third quarter of 2026, compared to 59.82% for the second quarter of 2026 and 58.80% for the third quarter of 2025, reflecting continued expense discipline following the 1st Colonial and William Penn acquisitions.

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This press release, and oral statements made regarding the subjects of this release, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are not historical facts and include expressions about management's confidence and strategies and management's current views and expectations about new and existing programs and products, relationships, opportunities, technology, and market conditions. These statements may be identified by such forward-looking terminology as "continues," "expect," "look," "believe," "anticipate," "may," "will," "should," "projects," "strategy" or similar statements. Actual results may differ materially from such forward-looking statements, and no reliance should be placed on any forward-looking statement. Factors that may cause results to differ materially from such forward-looking statements include, but are not limited to, changes in interest rates, spreads on earning assets and interest-bearing liabilities, and interest rate sensitivity; prepayment speeds, loan originations, credit losses and market values on loans, collateral securing loans, and other assets; sources of liquidity; common shares outstanding; common stock price volatility; fair value of and number of stock-based compensation awards to be issued in future periods; the impact of changes in market values on securities held in Mid Penn’s portfolio; legislation affecting the financial services industry as a whole, and Mid Penn and Mid Penn Bank individually or collectively, including tax legislation; results of the regulatory examination and supervision process and oversight, including changes in monetary policy and capital requirements; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies; increasing price and product/service competition by competitors, including new entrants; rapid technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; the mix of products/services; containing costs and expenses; governmental and public policy changes; protection and validity of intellectual property rights; reliance on large customers; technological, implementation and cost/financial risks in large, multi-year contracts; the outcome of future litigation and governmental proceedings, including tax-related examinations and other matters; continued availability of financing; the availability of financial resources in the amounts, at the times and on the terms required to support Mid Penn and Mid Penn Bank’s future businesses; material differences in the actual financial results of merger, acquisition and investment activities compared with Mid Penn’s initial expectations, including the full realization of anticipated cost savings and revenue enhancements, the possibility that the anticipated benefits of a transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the companies or as a result of the strength of the economy and competitive factors in legacy Mid Penn and target markets; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of a transaction; the ability to complete the integration of Mid Penn and its target successfully; the dilution caused by Mid Penn’s issuance of additional shares of its capital stock in connection with a transaction; and other factors that may affect the future results of Mid Penn.

For a more detailed description of these and other factors which would affect our results, please see Mid Penn’s filings with the SEC, including those risk factors identified in the "Risk Factors" section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2025 and subsequent filings with the SEC. The statements in this press release are made as of the date of this press release, even if subsequently made available by Mid Penn on its website or otherwise. Mid Penn does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of unanticipated events, except as required by law.

SUMMARY FINANCIAL HIGHLIGHTS (Unaudited):

CONSOLIDATED BALANCE SHEETS (Unaudited):

CONSOLIDATED STATEMENTS OF INCOME (Unaudited):

CONSOLIDATED – AVERAGE BALANCE SHEET AND NET INTEREST INCOME ANALYSIS (Unaudited):

ALLOWANCE FOR CREDIT LOSSES AND ASSET QUALITY (Unaudited):