MID PENN BANCORP INC 10-Q

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, and should be read in conjunction with the consolidated financial statements and other financial information presented in this report and our Annual Report on Form 10-K for the year ended December 31, 2024. 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 2024 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 or in documents incorporated by reference herein, including matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, or Exchange Act. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” or words or phrases of similar meaning. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements. The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements: • the effects of future economic conditions on Mid Penn, the Bank, our nonbank subsidiaries, and our 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 our 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 the Bank’s capital stock is currently subject, or imposition of any additional taxes on the capital stock of Mid Penn or the 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 regulatory agencies, as well as the Public Company Accounting Oversight Board, Financial Accounting Standards Board, the SEC, and other accounting and reporting rule making authorities; • the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; • changes in technology; 51 Table of Contents MID PENN BANCORP, INC. • our ability to implement business strategies, including our acquisition strategy; • our ability to successfully expand our franchise, including through 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; • 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 possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Merger; • the ability to obtain regulatory approvals and satisfy other closing conditions to the Merger, including 1st Colonial shareholder approval; • certain restrictions during the pendency of the proposed Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions; • diversion of management's attention from ongoing business operations and opportunities; • cost savings and any revenue synergies from the Merger may not be fully realized or may take longer than anticipated to be realized • deposits attrition, customer or employee loss and/or revenue loss as a result of the proposed Merger; • expenses related to the proposed Merger being greater than expected; • the failure of assumptions underlying the establishment of reserves for loan and lease losses, the assessment of potential impairment of investment securities, and estimations of values of collateral and various financial assets and liabilities; • our ability to maintain compliance with the listing rules of The NASDAQ Stock Market; • our ability to maintain the value and image of our brand and protect our 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; • the risk factors described in Item 1A of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024 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. 52 Table of Contents MID PENN BANCORP, INC. 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 September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 2024 2025 2024 Net Income $ 18,297 $ 12,301 $ 36,801 $ 36,205 Diluted EPS $ 0.79 $ 0.74 $ 1.70 $ 2.18 Dividends declared $ 0.22 $ 0.20 $ 0.62 $ 0.60 Return on average assets (2) 1.14 % 0.89 % 0.82 % 0.89 % Return on average equity (2) 9.26 % 8.66 % 6.97 % 8.69 % Net interest margin (1)(2) 3.60 % 3.13 % 3.48 % 3.07 % Nonperforming assets to total assets 0.44 % 0.32 % 0.44 % 0.32 % Net charge-offs to average loans (annualized) 0.008 % 0.031 % 0.074 % 0.037 % (1) Presented on a FTE basis using a 21% Federal tax rate and statutory interest expense disallowances. See also the "Net Interest Income" section. (2) Annualized ratios Summary of Financial Results • Net Income Per Share - Mid Penn’s net income available to common shareholders ("earnings") for the three months ended September 30, 2025 was $18.3 million, or $0.80 per basic common share and $0.79 per diluted common share, compared to earnings of $12.3 million, or $0.74 per both common share basic and diluted for the three months ended September 30, 2024. The increase in net income per diluted share was partially offset by the higher number of shares outstanding in 2025, which contributed to the lower year-over-year EPS growth rate. Mid Penn's earnings for the nine months ended September 30, 2025 were $36.8 million, or $1.73 per basic common share, and $1.70 per diluted common share, compared to earnings of $36.2 million, or $2.18 per both common share basic and diluted for the nine months ended September 30, 2024. ◦ Net Interest Margin - For the third quarter of 2025, Mid Penn’s net interest margin was 3.60% versus 3.13% for the same period of 2024. For the nine months ended September 30, 2025, net interest margin was 3.48% versus 3.07% for the same period of 2024. The yield on interest-earning assets for the three months ended September 30, 2025 increased 8 basis points from the same period of 2024. The rate on interest-bearing liabilities decreased 48 basis points from the same period of 2024. ◦ Loan Growth - Total loans, net of une arned income, as of September 30, 2025 were $4.8 billion compared to $4.4 billion as of December 31, 2024, an increase of $378.1 million, or 8.5%. The growth was primarily driven by an increase in residential mortgage loans of $226.5 million , an increase in owner occupied commercial real estate of $76.0 million, an increase in nonowner occupied commercial real estate of $69.4 million , a $32.5 million increase in multifamily loans, and an increase in commercial and industrial loans of $18.7 million, partially offset by a $43.7 million decrease in construction loans. Loans from the William Penn acquisition contributed $405.3 million to this increase. ◦ Deposit Growth - Total deposits increased $652.8 million, or 13.9%, from $4.7 billion at December 31, 2024, to $5.3 billion at September 30, 2025. The growth was driven by an increase of $538.3 million in interest-bearing transaction accounts, an increase of $77.2 million in noninterest-bearing accounts, and an 53 Table of Contents MID PENN BANCORP, INC. increase of $37.3 million in time deposits. Deposits from the William Penn acquisition contributed $619.8 million to this increase. • Asset Quality - ACL-loans at September 30, 2025 were $37.3 million, or 0.77% of total loans, as compared to $35.5 million, or 0.80% of total loans at December 31, 2024. ◦ Net Charge-offs/Recoveries - Mid Penn had net charge-offs of $91 thousand and $347 thousand for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025, net charge-offs were $899 thousand compared to $409 thousand for the same period of 2024. ◦ Nonperforming assets - Total nonperforming assets were $27.3 million at September 30, 2025, an increase compared to nonperforming assets of $22.7 million at December 31, 2024. The increase during 2025 was primarily related to the addition of two commercial real estate loans with a combined balance of $8.8 million being foreclosed in the second quarter of 2025, offset by payoffs and paydowns in the third quarter of 2025. Delinquency, measured as loans past due 30 days or more, including loans on nonaccrual status, was 0.68% of total loans at September 30, 2025, compared to 0.52% and 0.61% as of December 31, 2024 and September 30, 2024, respectively. ◦ Provision/Benefit for credit losses - loans - The benefit for credit losses - loans was $187 thousand for the three months ended September 30, 2025 compared to a provision of $621 thousand for the same period of 2024. The benefit for credit losses on off-balance sheet credit exposures was $247 thousand for the three months ended September 30, 2025, compared to $105 thousand for the same period of 2024. The provision for credit losses on loans was $2.4 million for the nine months ended September 30, 2025, an increase of $595 thousand compared to the provision for credit losses of $1.8 million for the nine months ended September 30, 2024. This increase for the nine months ended September 30, 2025 was primarily due to a $2.3 million reserve on non-PCD loans acquired through the William Penn acquisition, offset by lower loan balances as a result of an increase in observed prepayment speeds. The benefit for credit losses on off-balance sheet credit exposures was $247 thousand and $243 thousand for the three and nine months ended September 30, 2025, respectively. • Noninterest Income - Noninterest income totaled $8.2 million for the three months ended September 30, 2025 compared to $5.2 million for the same period of 2024. The increase is primarily due to a $329 thousand increase in earnings from the cash surrender value of life insurance, a $245 thousand increase in mortgage banking, a $136 thousand increase in fiduciary and wealth management, and a $2.2 million increase in other miscellaneous noninterest income, driven by $534 thousand in recoveries on loans previously acquired in business combinations. These recoveries are recognized in noninterest income rather than a reduction to the allowance for credit losses, consistent with purchase accounting treatment, as expected credit losses on acquired loans were reflected in fair value adjustments at the acquisition date. This increase also includes a $420 thousand gain on the closing of an investment of a reinsurance entity acquired from another institution, a $384 thousand increase in insurance commissions, a $341 thousand increase in loan level swap fees, and a $279 thousand increase in swap cancellation gains tied to eliminated brokered deposits. 54 Table of Contents MID PENN BANCORP, INC. Noninterest income totaled $19.6 million for the nine months ended September 30, 2025 compared to $16.3 million for the same period of 2024. The increase in noninterest income was primarily driven by a $509 thousand increase in earnings from the cash surrender value of life insurance, a $460 thousand increase in mortgage banking, a $421 thousand increase in fiduciary and wealth management, and a $1.7 million increase in other noninterest income, driven by $534 thousand in recoveries on loans previously acquired in business combinations. These recoveries are recognized in noninterest income rather than a reduction to the allowance for credit losses, consistent with purchase accounting treatment, as expected credit losses on acquired loans were reflected in fair value adjustments at the acquisition date. This increase also includes a $909 thousand increase in loan level swap fees, a $810 thousand increase in insurance commissions, a $420 thousand gain on the closing of an investment of a reinsurance entity acquired from another institution, and a $279 thousand in swap cancellation gains tied to eliminated brokered deposits, partially offset by a $1.8 million decrease in bank owned life insurance benefits received. • Noninterest Expense - Noninterest expense totaled $38.0 million for the three months ended September 30, 2025, an increase of $8.0 million, or 26.8%, compared to noninterest expense of $30.0 million for the same period of 2024. Salaries and benefits increased $4.8 million for the three months ended September 30, 2025 compared to the same period in 2024. The increase is attributable to equity-based compensation expense for stock options and restricted stock awards totaling $753 thousand that were recognized during the third quarter of 2025 (future expected compensation expense related to these awards is approximately $2.2 million over the remaining vesting periods) and the retail staff additions at the twelve retail locations added through the William Penn acquisition. Software licensing and utilization costs increased $944 thousand for the three months ended September 30, 2025 compared to the same period in 2024. The increase reflects additional costs to (i) license the additional William Penn branches; and (ii) upgrades to internal systems, including network storage, cybersecurity, and data security enhancements in response to the Bank's larger size and increased IT complexity. Occupancy expenses increased $827 thousand for the three months ended September 30, 2025, compared to the same period in 2024. The increase was driven by the facility operating costs of the additional retail locations added through the William Penn acquisition. Noninterest expense totaled $116.4 million for the nine months ended September 30, 2025 compared to $86.7 million for the same period of 2024. Merger and acquisition expenses increased $11.4 million for the nine months ended September 30, 2025, which includes $11.2 million of merger related expenses related to the William Penn acquisition and $164 thousand related to the Charis Insurance Group acquisition. Salaries and benefits increased $10.9 million for the nine months ended September 30, 2025, compared to the same period in 2024, largely driven by the same Q3 items noted above, including $2.0 million in equity compensation and staff additions from the William Penn acquisition. Software licensing and utilization costs increased $2.5 million for the nine months ended September 30, 2025, compared to the same period in 2024, reflecting the same Q3 drivers noted above. These include the onboarding of newly acquired William Penn branches, investments in IT infrastructure and cybersecurity. Occupancy expenses increased $1.6 million for the nine months ended September 30, 2025, compared to the same period in 2024. The increase was driven by the facility operating costs of the additional retail locations added through the William Penn acquisition. • Liquidity - Current liquidity, including borrowing capacity, increased to $1.7 billion or 175.8% of uninsured and uncollateralized deposits, or approximately 32.3% of total deposits. 55 Table of Contents MID PENN BANCORP, INC. Critical Accounting Estimates The 2024 Annual Report on Form 10-K 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. These estimates require management’s most difficult judgments as a result of the need to make estimates about the effects of matters that are inherently uncertain. Management of the Corporation considers the accounting judgments relating to the allowance for credit losses, business combinations, and goodwill impairment to be the accounting areas that require the most subjective and complex judgments. There have been no material changes to Mid Penn's critical accounting estimates as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024. 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. 56 Table of Contents MID PENN BANCORP, INC. 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 September 30, 2025 September 30, 2024 (Dollars in thousands) Average Balance Interest Yield/ Rate (2) Average Balance Interest Yield/ Rate (2) ASSETS: Interest Bearing Balances $ 26,950 $ 196 2.89 % $ 25,123 $ 223 3.53 % Investment Securities: Taxable 716,356 6,502 3.60 % 537,257 3,682 2.73 % Tax-exempt 65,664 331 2.00 % 73,329 359 1.95 % Total Investment Securities 782,020 6,833 3.47 % 610,586 4,041 2.63 % Federal funds sold 310,525 3,463 4.42 % 75,683 1,043 5.48 % Loans, net of unearned income 4,804,163 76,262 6.30 % 4,405,969 68,080 6.15 % Restricted investment in bank stocks 7,143 112 6.22 % 13,252 454 13.63 % Total Interest-earning Assets 5,930,801 86,866 5.81 % 5,130,613 73,841 5.73 % Cash and Due from Banks 49,582 44,052 Other Assets 405,368 295,976 Total Assets $ 6,385,751 $ 5,470,641 LIABILITIES & SHAREHOLDERS' EQUITY: Interest-bearing Demand $ 1,268,802 $ 5,736 1.79 % $ 1,066,878 $ 5,291 1.97 % Money market 1,237,556 9,046 2.90 % 921,054 7,060 3.05 % Savings 333,545 64 0.08 % 272,186 63 0.09 % Time 1,775,539 17,785 3.97 % 1,561,633 18,275 4.66 % Total Interest-bearing Deposits 4,615,442 32,631 2.80 % 3,821,751 30,689 3.19 % Short-term borrowings 1 — 0.00 % 169,754 2,296 5.38 % Long-term debt 23,302 264 4.49 % 23,757 264 4.42 % Subordinated debt 37,224 342 3.65 % 45,969 423 3.66 % Total Interest-bearing Liabilities 4,675,969 33,237 2.82 % 4,061,231 33,672 3.30 % Noninterest-bearing Demand 852,702 775,935 Other Liabilities 73,533 68,175 Shareholders' Equity 783,547 565,300 Total Liabilities & Shareholders' Equity $ 6,385,751 $ 5,470,641 Net Interest Income $ 53,629 $ 40,169 Taxable Equivalent Adjustment (1) 245 252 Net Interest Income (taxable-equivalent basis) $ 53,874 $ 40,421 Total Yield on Earning Assets 5.81 % 5.73 % Rate on Supporting Liabilities 2.82 % 3.30 % Average Interest Spread 2.99 % 2.43 % Net Interest Margin (1) 3.60 % 3.13 % (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances. (2) Annualized ratios 57 Table of Contents MID PENN BANCORP, INC. 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 September 30, 2025 in comparison to the same period in 2024: Three months ended September 30, 2025 vs. September 30, 2024 Increase (decrease) (In thousands) Volume Rate Net INTEREST INCOME: Interest Bearing Balances $ 16 $ (43) $ (27) Investment Securities: Taxable 1,231 1,589 2,820 Tax-exempt (38) 10 (28) Total Investment Securities 1,193 1,599 2,792 Federal funds sold 3,245 (825) 2,420 Loans 6,170 2,012 8,182 Restricted investment in bank stocks (210) (132) (342) Total Interest Income 10,414 2,611 13,025 INTEREST EXPENSE: Interest-Bearing Deposits: Interest-bearing demand 1,004 (559) 445 Money market 2,433 (447) 1,986 Savings 14 (13) 1 Time 2,510 (3,000) (490) Total Interest-Bearing Deposits 5,961 (4,019) 1,942 Short-term borrowings (2,302) 6 (2,296) Long-term debt (5) 5 — Subordinated debt (81) — (81) Total Interest Expense 3,573 (4,008) (435) NET INTEREST INCOME $ 6,841 $ 6,619 $ 13,460 For the three months ended September 30, 2025, net interest income was $53.6 million compared to net interest income of $40.2 million for the three months ended September 30, 2024. The tax-equivalent net interest margin for the three months ended September 30, 2025 was 3.60% compared to 3.13% for the third quarter of 2024, representing a 47 bp increase compared to the same period in 2024. The yield on interest-earning assets increased to 5.81% for the quarter ended September 30, 2025 from 5.73% for the quarter ended September 30, 2024. We continue to see increases in interest income on loans and Federal funds sold due to higher balances from prior quarters. Average investment securities increased $171.4 million and the yield on those investment securities increased 83 bps during the third quarter of 2025 compared to the third quarter of 2024, increasing interest income $1.2 million due to volume, and $1.6 million due to rates. Average loans increased $398.2 million, and the yield on those loans increased 15 bps, contributing $6.2 million and $2.0 million, respectively, to the increase in interest income. Interest expense decreased $435 thousand during the third quarter of 2025 compared to the third quarter of 2024. The rate of interest-bearing liabilities decreased from 3.30% for the third quarter of 2024 to 2.82% for the third quarter of 2025. The decrease in the rate was primarily a result of a decrease in short-term borrowings, and a decrease in time deposits. Mid Penn continued to offer higher rates over the comparable period to both retain and attract deposits. 58 Table of Contents MID PENN BANCORP, INC. 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. 59 Table of Contents MID PENN BANCORP, INC. Average Balances, Income and Interest Rates on a Taxable-Equivalent Basis For the Nine Months Ended September 30, 2025 2024 (Dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate ASSETS: Interest Bearing Balances $ 23,694 $ 476 2.69 % $ 33,549 $ 973 3.87 % Investment Securities: Taxable 624,228 15,381 3.29 536,894 11,183 2.78 Tax-exempt 67,528 1,023 2.03 74,584 1,106 1.98 Total Investment Securities 691,756 16,404 3.17 611,478 12,289 2.68 Federal funds sold 191,156 6,152 4.30 35,311 1,461 5.53 Loans, net of unearned income 4,664,089 215,268 6.17 4,351,253 197,412 6.06 Restricted investment in bank stocks 7,063 330 6.25 16,241 1,136 9.34 Total Interest-earning Assets 5,577,758 238,630 5.72 5,047,832 213,271 5.64 Cash and Due from Banks 46,660 40,416 Other Assets 350,043 301,733 Total Assets $ 5,974,461 $ 5,389,981 LIABILITIES & SHAREHOLDERS' EQUITY: Interest-bearing Demand $ 1,148,549 $ 15,371 1.79 % $ 979,676 $ 13,652 1.86 % Money market 1,148,107 24,337 2.83 902,104 19,660 2.91 Savings 300,981 188 0.08 280,473 187 0.09 Time 1,701,585 51,980 4.08 1,513,617 51,985 4.59 Total Interest-bearing Deposits 4,299,222 91,876 2.86 3,675,870 85,484 3.11 Short-term borrowings 10,679 376 4.71 242,232 10,066 5.55 Long-term debt 23,416 773 4.41 29,379 1,059 4.81 Subordinated debt 42,686 1,261 3.95 46,122 1,271 3.68 Total Interest-bearing Liabilities 4,376,003 94,286 2.88 3,993,603 97,880 3.27 Noninterest-bearing Demand 806,861 778,421 Other Liabilities 86,147 62,927 Shareholders' Equity 705,450 555,030 Total Liabilities & Shareholders' Equity $ 5,974,461 $ 5,389,981 Net Interest Income $ 144,344 $ 115,391 Taxable Equivalent Adjustment (1) 732 766 Net Interest Income (taxable-equivalent basis) $ 145,076 $ 116,157 Total Yield on Earning Assets 5.72 % 5.64 % Rate on Supporting Liabilities 2.88 3.27 Average Interest Spread 2.84 2.37 Net Interest Margin (1) 3.48 3.07 (1) Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowances (2) Annualized ratios 60 Table of Contents MID PENN BANCORP, INC. The following table summarizes the changes in FTE interest income and interest expense resulting from changes in average balances, volume, and changes in rates for the nine months ended September 30, 2025 in comparison to the same period in 2024: Nine Months Ended September 30, 2025 vs. September 30, 2024 (In thousands) Increase (decrease) Volume Rate Net INTEREST INCOME: Interest Bearing Balances $ (286) $ (211) $ (497) Investment Securities: Taxable 1,817 2,381 4,198 Tax-exempt (105) 22 (83) Total Investment Securities 1,712 2,403 4,115 Federal funds sold 6,442 (1,751) 4,691 Loans, net of unearned income 14,180 3,676 17,856 Restricted investment in bank stocks (641) (165) (806) Total Interest Income 21,407 3,952 25,359 INTEREST EXPENSE: Interest-Bearing Deposits: Interest-bearing demand 2,351 (632) 1,719 Money market 5,356 (679) 4,677 Savings 14 (13) 1 Time 6,450 (6,455) (5) Total Interest-Bearing Deposits 14,171 (7,779) 6,392 Short-term borrowings (8,153) (1,537) (9,690) Long-term debt (215) (71) (286) Subordinated debt (95) 85 (10) Total Interest Expense 5,708 (9,302) (3,594) NET INTEREST INCOME $ 15,699 $ 13,254 $ 28,953 For the nine months ended September 30, 2025, net interest income was $144.3 million compared to net interest income of $115.4 million for the nine months ended September 30, 2024. FTE net interest income was $145.1 million for the nine months ended September 30, 2025, an increase of $28.9 million, or 24.9%, compared to the same period in 2024. Mid Penn’s FTE net interest margin for the nine months ended September 30, 2025 was 3.48% compared to 3.07% for the same period in 2024, representing a 41 bp increase, primarily a result of a decrease in short-term borrowings, a decrease in long-term debt, and a decrease in time deposits. The higher yields and the growth in interest-earning assets contributed $4.0 million and $21.4 million, respectively, to the increase in interest income. The yield on interest-earning assets increased 8 bps to 5.72% for the nine months ended September 30, 2025 compared to 5.64% for the same period of 2024. Average interest-earning assets increased $22.4 million, or 10.5%, during the nine months ended September 30, 2025 compared to the same period of 2024. Average investment securities increased $80.3 million, or 13.1%, and the yield on those investment securities increased 49 bps during the nine months ended September 30, 2025, contributing $1.7 million and $2.4 million, respectively, to interest income. Average loans increased $312.8 million, and the yield on those loans increased 11 bps contributing $14.2 million and $3.7 million, respectively, to the increase in interest income. 61 Table of Contents MID PENN BANCORP, INC. Interest expense decreased $3.6 million during the first nine months of 2025 compared to the same period of 2024. The rate on interest-bearing liabilities decreased from 3.27% for the first nine months of 2024 to 2.88% for the first nine months of 2025. The decrease in the rate was driven by the Bank lowering rates in response to the Federal Reserve interest rate cuts in 2024. The rate on average interest-bearing deposits decreased 39 bps, reducing interest expense by $7.8 million during the nine months ended September 30, 2025 compared to the same period in 2024. In addition, average short-term borrowings decreased to $10.7 million, deducting $9.7 million from interest expense during the nine months ended September 30, 2025 compared to the same period in 2024. Provision for Credit Losses - Loans The benefit for credit losses on loans was $187 thousand for the three months ended September 30, 2025 compared to a provision of $621 thousand for the three months ended September 30, 2024. The decrease in provision was primarily driven by lower loan balances as a result of an increase in observed prepayment speeds. The provision for credit losses on loans was $2.4 million for the nine months ended September 30, 2025 compared to a provision of $1.8 million for the same period in 2024. The increase in provision was primarily driven by a $2.3 million reserve established for non-PCD loans acquired in the William Penn acquisition, partially offset by lower loan balances as a result of an increase in observed prepayment speeds. Noninterest Income For the three months ended September 30, 2025, noninterest income totaled $8.2 million, an increase of $3.0 million, or 58.0%, compared to noninterest income of $5.2 million for the three months ended September 30, 2024. The increase is primarily due to a $329 thousand increase in earnings from the cash surrender value of life insurance, a $245 thousand increase in mortgage banking, a $136 thousand increase in fiduciary and wealth management, and a $2.2 million increase in other miscellaneous noninterest income, driven by a $909 thousand increase in loan level swap fees and a $534 thousand increase in recoveries on loans previously acquired in business combinations. These recoveries are recognized in noninterest income rather than a reduction to the allowance for credit losses, consistent with purchase accounting treatment, as expected credit losses on acquired loans were reflected in fair value adjustments at the acquisition date. This increase also includes a $420 thousand gain on the closing of an investment of a reinsurance entity acquired from another institution, and $279 thousand in swap cancellation gains tied to eliminated brokered deposits. The following table and explanations that follow provide additional analysis of noninterest income: Three Months Ended September 30, (Dollars in thousands) 2025 2024 $ Variance % Variance Fiduciary and wealth management $ 1,340 $ 1,204 $ 136 11.3 % ATM debit card interchange 1,019 962 57 5.9 Service charges on deposits 647 549 98 17.9 Mortgage banking 1,013 768 245 31.9 Mortgage hedging 50 (1) 51 N/M Net gain on sales of SBA loans — 151 (151) (100.0) Earnings from cash surrender value of life insurance 605 276 329 119.2 Other 3,509 1,269 2,240 176.5 Total $ 8,183 $ 5,178 $ 3,005 58.0 % For the nine months ended September 30, 2025, noninterest income totaled $19.6 million, an increase of $3.2 million, or 19.7%, compared to noninterest income of $16.3 million for the nine months ended September 30, 2024. The increase in noninterest income was primarily driven by a $509 thousand increase in earnings from the cash surrender value of life insurance, a $460 thousand increase in mortgage banking, a $421 thousand increase in fiduciary and wealth management, and a $1.7 million increase in other noninterest income, driven by $534 thousand in recoveries on loans previously acquired in business combinations. These recoveries are recognized in noninterest income rather than a reduction to the allowance for credit losses, consistent with purchase accounting treatment, as expected credit losses on acquired loans were reflected in fair value adjustments at the acquisition date. This increase also includes a $420 thousand gain on the closing of an investment of a reinsurance entity acquired from another institution, and $279 thousand in swap cancellation gains tied to eliminated brokered deposits. 62 Table of Contents MID PENN BANCORP, INC. Nine Months Ended September 30, (Dollars in thousands) 2025 2024 $ Variance % Variance Fiduciary and wealth management $ 3,886 $ 3,465 $ 421 12.2 % ATM debit card interchange 2,896 2,880 16 0.6 Service charges on deposits 1,861 1,597 264 16.5 Mortgage banking 2,280 1,820 460 25.3 Mortgage hedging 34 (1) 35 N/M Net gain on sales of SBA loans 120 332 (212) (63.9) Earnings from cash surrender value of life insurance 1,370 861 509 59.1 Other 7,118 5,390 1,728 32.1 Total $ 19,565 $ 16,344 $ 3,221 19.7 % Noninterest Expense For the three months ended September 30, 2025, noninterest expense totaled $38.0 million, an increase of $8.0 million, or 26.8%, compared to noninterest expense of $30.0 million for the same period in 2024. Salaries and benefits increased $4.8 million for the three months ended September 30, 2025 compared to the same period in 2024. The increase is attributable to equity-based compensation expense for stock options and restricted stock awards totaling $753 thousand that were recognized during the third quarter of 2025 (future expected compensation expense related to these awards is approximately $2.2 million over the remaining vesting periods) and the retail staff additions at the twelve retail locations added through the William Penn acquisition. Software licensing and utilization costs increased $944 thousand for the three months ended September 30, 2025 compared to the same period in 2024. The increase reflects additional costs to (i) license the additional William Penn branches; and (ii) upgrades to internal systems, including network storage, cybersecurity, and data security enhancements in response to the Bank's larger size and increased IT complexity. Occupancy expenses increased $827 thousand for the three months ended September 30, 2025, compared to the same period in 2024. The increase was driven by the facility operating costs of the additional retail locations added through the William Penn acquisition. The following table and explanations that follow provide additional analysis of noninterest expense: Three Months Ended September 30, (Dollars in thousands) 2025 2024 $ Variance % Variance Salaries and employee benefits $ 20,941 $ 16,156 $ 4,785 29.6 % Software licensing and utilization 3,310 2,366 944 39.9 Occupancy expense, net 2,642 1,815 827 45.6 Equipment expense 1,248 1,206 42 3.5 Shares tax 1,006 824 182 22.1 Legal and professional fees 1,070 1,613 (543) (33.7) ATM/card processing 557 606 (49) (8.1) Intangible amortization 944 460 484 105.2 FDIC Assessment 422 1,150 (728) (63.3) Loss/(gain) on sale of foreclosed assets, net 471 (35) 506 (1445.7) Merger and acquisition expense 233 109 124 113.8 Other expenses 5,138 3,689 1,449 39.3 Total Noninterest Expense $ 37,982 $ 29,959 $ 8,023 26.8 % 63 Table of Contents MID PENN BANCORP, INC. For the nine months ended September 30, 2025, noninterest expense totaled $116.4 million, an increase of $29.7 million, or 34.3%, compared to noninterest expense of $86.7 million for the nine months ended September 30, 2024. Merger and acquisition expenses increased $11.4 million for the nine months ended September 30, 2025, which includes $11.2 million of merger related expenses related to the William Penn acquisition and $164 thousand related to the Charis Insurance Group acquisition. Salaries and benefits increased $10.9 million for the nine months ended September 30, 2025, compared to the same period in 2024. The increase is attributable to (i) equity-based compensation expense for stock options and restricted stock awards totaling $2.8 million that were recognized in the nine months ended September 30, 2025; (ii) the retail staff additions at the twelve retail locations added through the William Penn acquisition; and (iii) the retention of various William Penn team members through the completion of systems integration, which occurred on June 20, 2025. Software licensing and utilization costs increased $2.5 million for the nine months ended September 30, 2025, compared to the same period in 2024. The increase reflects additional costs to (i) license the additional William Penn branches; and (ii) upgrades to internal systems, including network storage, cybersecurity, and data security enhancements in response to the Bank's larger size and increased IT complexity. Occupancy expenses increased $1.6 million for the nine months ended September 30, 2025, compared to the same period in 2024. The increase was driven by the facility operating costs of the additional retail locations added through the William Penn acquisition. Nine Months Ended September 30, (Dollars in thousands) 2025 2024 $ Variance % Variance Salaries and employee benefits $ 58,003 $ 47,151 $ 10,852 23.0 % Software licensing and utilization 9,156 6,694 2,462 36.8 Occupancy expense, net 7,281 5,658 1,623 28.7 Equipment expense 3,590 3,715 (125) (3.4) Shares tax 2,531 1,945 586 30.1 Legal and professional fees 2,889 3,300 (411) (12.5) ATM/card processing 1,911 1,650 261 15.8 Intangible amortization 2,116 1,313 803 61.2 FDIC Assessment 2,406 3,327 (921) (27.7) Loss on sale of foreclosed assets, net 443 7 436 6228.6 Merger and acquisition expense 11,558 109 11,449 N/M Other expenses 14,538 11,834 2,704 22.8 Total Noninterest Expense $ 116,422 $ 86,703 $ 29,719 34.3 % Income Taxes The provision for income taxes was $6.0 million for the three months ended September 30, 2025 compared to $2.6 million for the same period in 2024. The provision for income taxes was $8.6 million and $7.6 million for the nine months ended September 30, 2025 and 2024, respectively. The provision for income taxes for the nine months ended September 30, 2025 and 2024 reflects a combined Federal and State effective tax rate of 18.9% and 17.4%, 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. 64 Table of Contents MID PENN BANCORP, INC. July 4, 2025, the President signed H.R. 1, the “One Big Beautiful Bill Act,” into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. These changes did not have a material impact on the Company’s federal income tax expense or liability for the three and nine month periods ended September 30, 2025. The Company is currently evaluating the impact on future periods. Financial Condition Mid Penn’s total assets were $6.3 billion as of September 30, 2025, reflecting an increase of $796.4 million, or 14.6%, compared to total assets of $5.5 billion as of December 31, 2024. The increase was primarily driven by an increase in loans as a result of the William Penn acquisition, an increase in available for sale investment securities, and an increase in Federal funds sold. 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. The carrying value of total investment securities as of September 30, 2025 was $781.4 million compared to $642.9 million as of December 31, 2024. Mid Penn does not intend presently to grow the investment portfolio beyond levels necessary to support pledging requirements. The following table presents the expected maturities of the investment portfolio and the weighted average yields (calculated based on historical cost): Maturing (Dollars in thousands) One Year and Less After One Year thru Five Years After Five Years Thru Ten Years After Ten Years As of September 30, 2025 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 $ 999 3.10 % $ 14,600 2.38 % $ 4,343 3.09 % $ — — % Mortgage-backed U.S. government agencies — — — — 7,919 3.01 357,704 4.57 State and political subdivision obligations — — — — 3,124 2.50 654 2.23 Corporate debt securities 969 2.75 9,399 6.08 27,641 5.07 — — $ 1,968 2.93 % $ 23,999 3.84 % $ 43,027 4.30 % $ 358,358 4.56 % Held to maturity securities, at amortized cost: U.S. Treasury and U.S. government agencies $ 9,096 2.31 % $ 106,869 1.86 % $ 117,580 2.09 % $ — — % Mortgage-backed U.S. government agencies 10 3.99 1,934 2.97 4,029 2.73 27,613 1.96 State and political subdivision obligations 10,647 2.51 33,156 2.39 15,077 2.40 12,637 2.54 Corporate debt securities 2,000 2.25 4,446 4.50 9,000 3.01 — — $ 21,753 2.40 % $ 146,405 2.07 % $ 145,686 2.19 % $ 40,250 2.14 % 65 Table of Contents MID PENN BANCORP, INC. Loans, net of unearned income Total loans, net of unearned income, as of September 30, 2025 were $4.8 billion compared to $4.4 billion as of December 31, 2024. The growth of $378.1 million, or 8.5%, since December 31, 2024 was primarily the result of the addition of loans from the William Penn acquisition of $405.3 million. September 30, 2025 December 31, 2024 Change in Balance (Dollars in thousands) Balance % of Total Loans Balance % of Total Loans $ % Commercial real estate CRE Nonowner Occupied $ 1,320,394 27.5 % $ 1,251,010 28.1 % $ 69,384 5.5 % CRE Owner Occupied 700,019 14.5 624,007 14.0 76,012 12.2 Multifamily 445,412 9.2 412,900 9.3 32,512 7.9 Farmland 224,423 4.7 224,709 5.1 (286) (0.1) Total Commercial Real Estate 2,690,248 55.9 2,512,626 56.5 177,622 7.1 Commercial and industrial 724,106 15.0 705,392 15.9 18,714 2.7 Construction Residential Construction 91,502 1.9 99,399 2.2 (7,897) (7.9) Other Construction 290,326 6.0 326,171 7.3 (35,845) (11.0) Total Construction 381,828 7.9 425,570 9.5 (43,742) (10.3) Residential Mortgage 1-4 Family 1st Lien 430,504 8.9 313,592 7.1 116,912 37.3 1-4 Family Rental 411,653 8.5 336,636 7.6 75,017 22.3 HELOC and Junior Liens 174,953 3.6 140,392 3.2 34,561 24.6 Total Residential Mortgage 1,017,110 21.0 790,620 17.9 226,490 28.6 Consumer 7,842 0.2 8,862 0.2 (1,020) (11.5) $ 4,821,134 100.0 % $ 4,443,070 100.0 % $ 378,064 8.5 % 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, Chester, Clearfield, Cumberland, Dauphin, Delaware, Fayette, Huntingdon, Lancaster, Lehigh, Luzerne, Montgomery, Perry, Philadelphia, Schuylkill and Westmoreland, along with Burlington, Camden, Mercer, Middlesex and Monmouth counties of New Jersey. Commercial real estate, construction, and land development loans are collateralized mainly by mortgages on the income-producing real estate or land involved. Commercial, industrial, and agricultural loans are primarily made to business entities and may be secured by business assets, including commercial real estate, or may be unsecured. Residential real estate loans are secured by liens on the residential property. Consumer loans include installment loans, lines of credit and home equity loans. The Bank has no significant concentration of credit to any one borrower. The Bank’s highest concentration of credit by loan type is in commercial real estate. 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. 66 Table of Contents MID PENN BANCORP, INC. The following table presents the commercial real estate portfolio by property type along with the weighted average loan to value: (Dollars in thousands) September 30, 2025 December 31, 2024 Commercial Real Estate Balance % of portfolio Weighted Average LTV (2) Balance % of portfolio Weighted Average LTV (2) Owner Occupied (1) $ 700,019 26.0 % N/A $ 624,007 24.8 % N/A Farmland (1) 224,423 8.3 N/A 224,709 8.9 N/A Multifamily 445,412 16.6 55.1 412,900 16.4 63.8 Non Owner Occupied Retail 425,536 15.8 51.6 426,171 17.0 60.3 Office 275,215 10.2 64.6 296,468 11.8 63.2 Industrial 171,670 6.4 49.7 161,683 6.4 53.2 Hospitality 153,520 5.7 45.5 152,060 6.1 51.2 Flex 39,218 1.5 43.8 44,187 1.8 44.2 Mobile Home Park 15,976 0.6 58.4 17,748 0.7 67.7 Health Care 12,898 0.5 60.9 14,511 0.6 55.3 Other Property Types 226,361 8.4 57.4 138,182 5.5 64.1 Total Commercial Real Estate $ 2,690,248 100.0 % 54.4 % $ 2,512,626 100.0 % 59.9 % (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. 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 September 30, 2025 One Year and Less One to Five Years Five to Fifteen Years Over Fifteen Years Total Commercial real estate CRE Nonowner Occupied $ 135,503 $ 408,959 $ 482,913 $ 293,019 $ 1,320,394 CRE Owner Occupied 20,855 107,469 312,500 259,195 700,019 Multifamily 121,388 103,931 113,852 106,241 445,412 Farmland 331 9,428 65,027 149,637 224,423 Total Commercial real estate 278,077 629,787 974,292 808,092 2,690,248 Commercial and industrial 25,998 336,282 124,108 237,718 724,106 Construction Residential Construction 45,782 31,373 14,206 141 91,502 Other Construction 114,627 133,821 25,751 16,127 290,326 Total Construction 160,409 165,194 39,957 16,268 381,828 Residential mortgage 1-4 Family 1st Lien 6,201 31,303 99,232 293,768 430,504 1-4 Family Rental 37,958 30,857 146,405 196,433 411,653 HELOC and Junior Liens 6,229 15,680 41,534 111,510 174,953 Total Residential Mortgage 50,388 77,840 287,171 601,711 1,017,110 Consumer 2,052 1,398 1,474 2,918 7,842 Total loans held in portfolio $ 516,924 $ 1,210,501 $ 1,427,002 $ 1,666,707 $ 4,821,134 67 Table of Contents MID PENN BANCORP, INC. Fixed interest rates: Commercial real estate CRE Nonowner Occupied $ 94,729 $ 179,594 $ 62,942 $ 8,886 $ 346,151 CRE Owner Occupied 12,859 63,173 32,594 3,152 111,778 Multifamily 68,472 48,193 7,683 — 124,348 Farmland 324 7,394 5,745 — 13,463 Total Commercial real estate 176,384 298,354 108,964 12,038 595,740 Commercial and industrial 4,234 184,446 25,545 9,487 223,712 Construction Residential Construction 17,422 4,785 — — 22,207 Other Construction 17,216 23,100 550 860 41,726 Total Construction 34,638 27,885 550 860 63,933 Residential mortgage 1-4 Family 1st Lien 5,989 20,870 74,414 222,118 323,391 1-4 Family Rental 33,496 20,598 14,448 7,964 76,506 HELOC and Junior Liens 1,392 7,407 27,150 3,355 39,304 Total Residential Mortgage 40,877 48,875 116,012 233,437 439,201 Consumer 1,330 1,391 1,321 937 4,979 Total fixed interest rates $ 257,463 $ 560,951 $ 252,392 $ 256,759 $ 1,327,565 Floating interest rates: Commercial real estate CRE Nonowner Occupied $ 40,774 $ 229,365 $ 419,971 $ 284,133 $ 974,243 CRE Owner Occupied 7,996 44,296 279,906 256,043 588,241 Multifamily 52,916 55,738 106,169 106,241 321,064 Farmland 7 2,034 59,282 149,637 210,960 Total Commercial real estate 101,693 331,433 865,328 796,054 2,094,508 Commercial and industrial 21,764 151,836 98,563 228,231 500,394 Construction Residential Construction 28,360 26,588 14,206 141 69,295 Other Construction 97,411 110,721 25,201 15,267 248,600 Total Construction 125,771 137,309 39,407 15,408 317,895 Residential mortgage 1-4 Family 1st Lien 212 10,433 24,818 71,650 107,113 1-4 Family Rental 4,462 10,259 131,957 188,469 335,147 HELOC and Junior Liens 4,837 8,273 14,384 108,155 135,649 Total Residential Mortgage 9,511 28,965 171,159 368,274 577,909 Consumer 722 7 153 1,981 2,863 Total floating interest rates 259,461 649,550 1,174,610 1,409,948 3,493,569 Total fixed and floating interest rates $ 516,924 $ 1,210,501 $ 1,427,002 $ 1,666,707 $ 4,821,134 68 Table of Contents MID PENN BANCORP, INC. Credit Quality, Credit Risk, and Allowance for 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. For a complete description of Mid Penn’s ACL-loans 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. Changes in the ACL-loans are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2025 2024 2025 2024 Balance, beginning of period $ 37,615 $ 35,288 $ 35,514 $ 34,187 Purchase credit deteriorated loans — — 343 — Loans charged off during period (131) (364) (1,055) (476) Recoveries of loans previously charged off 40 17 156 67 Net charge-offs (91) (347) (899) (409) (Benefit)/provision for credit losses - loans (1) (187) 621 2,379 1,784 Balance, end of period $ 37,337 $ 35,562 $ 37,337 $ 35,562 Ratio of net charge-offs to average loans outstanding (annualized) 0.008 % 0.031 % 0.026 % 0.013 % Ratio of ACL - loans to net loans at end of period 0.77 % 0.80 % 0.77 % 0.80 % (1) Includes a $2.3 million initial provision related to non-PCD loans from the William Penn acquisition in the second quarter of 2025. 69 Table of Contents MID PENN BANCORP, INC. The following table presents the change in nonperforming asset categories as of September 30, 2025, December 31, 2024, and September 30, 2024. (Dollars in thousands) September 30, 2025 December 31, 2024 September 30, 2024 Nonperforming Assets: Total nonaccrual loans $ 17,957 $ 22,610 $ 17,380 Foreclosed real estate 9,346 44 281 Total nonperforming assets 27,303 22,654 17,661 Accruing loans 90 days or more past due 160 — 1 Total risk elements $ 27,463 $ 22,654 $ 17,662 Nonaccrual loans as a percentage of total loans outstanding 0.37 % 0.51 % 0.39 % Nonperforming assets as a percentage of total loans outstanding and foreclosed real estate 0.57 % 0.51 % 0.40 % Ratio of ACL-loans to nonperforming loans 207.92 % 157.07 % 204.61 % Total nonperforming assets were $27.3 million at September 30, 2025, an increase compared to nonperforming assets of $22.7 million at December 31, 2024. The increase during the year ended September 30, 2025 was primarily related to the addition of two commercial real estate loans with a combined balance of $8.8 million with respect to which foreclosure proceedings commenced in the second quarter of 2025, offset by payoffs and paydowns in the third quarter of 2025. Delinquency, measured as loans past due 30 days or more, including loans on nonaccrual status, was 0.68% of total loans at September 30, 2025, compared to 0.52% and 0.61% as of December 31, 2024 and September 30, 2024, respectively. Goodwill Mid Penn evaluates goodwill annually for impairment unless events occur which indicate that impairment is possible: a triggering event. At September 30, 2025, Mid Penn had goodwill of $136.6 million and Mid Penn's common stock continues to trade below book value, warranting additional analysis. In connection with such analysis, management has reviewed actual earnings in relation to forecasted earnings, liquidity levels, changes in deposit balances, and credit quality, among others. Management has not noted any factors which would indicate that an additional impairment test is necessary. Management will continue to monitor internal metrics and macroeconomic trends to determine if there is likelihood of goodwill impairment. Mid Penn's annual impairment test is scheduled to be conducted as of October 31, 2025. Deposits Total deposits increased $652.8 million, or 13.9%, from $4.7 billion on December 31, 2024, to $5.3 billion at September 30, 2025. The growth was driven by a $538.3 million increase in interest-bearing accounts, a $77.2 million increase in noninterest-bearing accounts, and a $37.3 million increase in time deposits. These increases were primarily driven by deposits from the William Penn acquisition of $619.8 million. 70 Table of Contents MID PENN BANCORP, INC. Average balances and average interest rates applicable to deposits by major classification: September 30, 2025 December 31, 2024 Change (Dollars in thousands) Balance Rate Balance Rate $ % Noninterest-bearing demand deposits $ 806,861 0.00 % $ 780,538 0.00 % $ 26,323 3.37 % Interest-bearing demand deposits 1,148,549 1.79 1,001,813 1.90 146,736 14.65 Money market 1,148,107 2.83 913,311 2.91 234,796 25.71 Savings 300,981 0.08 275,692 0.09 25,289 9.17 Time 1,701,585 4.08 1,541,654 4.57 159,931 10.37 $ 5,106,083 2.41 % $ 4,513,008 2.58 % $ 593,075 13.14 % As of September 30, 2025, uninsured deposits were approximately $1.0 billion compared to $1.4 billion as of December 31, 2024. The maturities of the uninsured time deposits as of September 30, 2025 were as follows: (In thousands) 2025 Three months or less $ 186,526 Over three months to six months 102,957 Over six months to twelve months 80,132 Over twelve months 16,862 $ 386,477 Borrowings Total short-term borrowings decreased $2.0 million, or 100.0%, from December 31, 2024. The decrease in short-term borrowings was driven by our objective to maintain a strong unencumbered liquid assets ratio, ensuring the availability of high-quality liquidity to meet potential near-term obligations. Total long-term borrowings were $23.3 million at September 30, 2025, a decrease of $345 thousand from December 31, 2024. 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. 71 Table of Contents MID PENN BANCORP, INC. The Consolidated Statements of Cash Flows provide additional information. Mid Penn’s operating activities during the nine months ended September 30, 2025 provided $66.8 million of cash, mainly due to net income. Cash used in investing activities during the nine months ended September 30, 2025 was $105.3 million, mainly the result of net cash received from acquisitions, proceeds from the maturity or call of investment securities and the net increase in loans, offset by purchases of available-for-sale securities. Cash provided by financing activities during the nine months ended September 30, 2025 totaled $14.5 million, primarily the result of an increase in net deposits, offset by common stock dividends paid. 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; • 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. Mid Penn maintained the following regulatory capital ratios in comparison to regulatory requirements: September 30, 2025 December 31, 2024 Regulatory Minimum for Capital Adequacy Fully Phased-In, with Capital Conversation Buffers Total Risk-Based Capital (to Risk-Weighted Assets) 15.50 % 13.98 % 10.50 % 4.00 % Tier I Risk-Based Capital (to Risk-Weighted Assets) 13.85 12.09 8.50 7.00 Common Equity Tier I (to Risk-Weighted Assets) 13.85 12.09 7.00 8.50 Tier I Leverage Capital (to Average Assets) 10.40 9.98 4.00 10.50 As of September 30, 2025 and December 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. However, future changes in regulations could increase capital requirements and may have an adverse effect on capital resources. 72 Table of Contents MID PENN BANCORP, INC. 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 practices have been, and will continue to be, of paramount importance to Mid Penn. Shareholders’ equity increased by $141.3 million, or 21.6%, from $655.0 million as of December 31, 2024 to $796.3 million as of September 30, 2025, primarily due to common stock issued to William Penn shareholders in the amount of $99.7 million and year to date earnings of $36.8 million. 73 Table of Contents MID PENN BANCORP, INC.