What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 235 added, 104 removed, 420 unchanged (45% of the section changed)

15 unchanged sentences

• the possibility that anticipated benefits of recent acquisitions, including cost savings and other synergies, may take longer to be realized or may not fully be achieved, and that attrition in client, partner or other relationships may be greater than expected;

• risks associated with acquired loan portfolios, including unexpected credit deterioration, valuation adjustments, or higher-than-anticipated credit losses;

• the effects of future economic conditions on Mid Penn, the Bank, our nonbank subsidiaries, and our markets and customers;

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• 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 disruptions arising from public health events or other external disruptions;

• business or economic disruption from public health events or other external disruptions;

• 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;

MID PENN BANCORP, INC.

• 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, including the adoption or interpretation of new accounting standards, as may be adopted by regulatory agencies, the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, the SEC, and other accounting and reporting rule making authorities;

• the effect of changes in accounting policies and practices, including the adoption or interpretation of new accounting standards, as may be adopted by regulatory agencies, 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;

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

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

• acts of war, terrorism, geopolitical instability, or other international conflicts;

• supply chain disruption;

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Accordingly, all forward-looking statements should be evaluated with this understanding of inherent uncertainty.

MID PENN BANCORP, INC.

Mid Penn is a financial holding company incorporated in August 1991 in the Commonwealth of Pennsylvania.

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Offsetting these revenue sources are provisions for credit losses, non-interest expenses and income taxes.

MID PENN BANCORP, INC.

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Dollars in thousands)

2026 2025 2026 2025

Net Income $ 21,691 $ 4,762 $ 30,397 $ 18,504

15 unchanged sentences

Additionally, on January 1, 2026, Mid Penn completed the acquisition of Cumberland Advisors, Inc.

("Cumberland Advisors"), a registered investment advisory firm, which had approximately $3.2 billion in assets under management, further expanding the Company's wealth management capabilities and fee-based revenue.

("Cumberland Advisors"), a registered investment advisory firm, which had approximately $3.2 billion in assets under management, further expanding the Corporation's wealth management capabilities and fee-based revenue.

On April 30, 2025, Mid Penn completed the William Penn acquisition, which added total assets of $726.5 million, including $405.3 million of loans.

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Mid Penn issued 3,506,795 shares of Mid Penn common stock as consideration for the $103.2 million purchase price.

The Corporation also granted replacement awards for 538,447 stock options, with a fair value of $3.1 million to continuing employees of William Penn.

The Corporation also granted replacement awards for 538,447 stock options and 215,386 restricted stock units, with a fair value of $3.1 million, to continuing employees of William Penn.

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, 2026 was $8.7 million, or $0.36 per basic and diluted common share, compared to earnings of $13.7 million, or $0.71 per both basic and diluted common share for the three months ended March 31, 2025.

• Net Interest Income

◦ Net Interest Margin - For the first quarter of 2026, Mid Penn’s net interest margin was 3.80% versus 3.37% for the same period of 2025.

The yield on interest-earning assets for the first quarter of 2026 increased 10 basis points from the same period of 2025.

The rate on interest-bearing liabilities decreased 43 basis points from the same period of 2025.

The increase, compared to the first quarter of 2025, was driven by higher loan and investment securities yields and a reduction in the cost of funds.

◦ Loan Growth - Total loans, net of une arned income, as of March 31, 2026 were $5.5 billion compared to $4.9 billion as of December 31, 2025, an increase of $647.1 million, or 13.3% .

The growth was primarily driven by the acquisition of 1st Colonial, which contributed to an increase in residential mortgages of $341.1 million, an increase in commercial real estate loans of $245.7 million, an increase in construction loans of $57.7 million, and an increase in commercial and industrial loans of $4.9 million.

• Net Income Per Share - Mid Penn’s net income available to common shareholders ("earnings") for the three months ended June 30, 2026 was $21.7 million, or $0.86 per basic common share and $0.85 per diluted common share, compared to earnings of $4.8 million, or $0.22 per basic and diluted common share for the three months ended June 30, 2025.

The increase in net income per diluted share primarily reflected earnings from the 1st Colonial and Cumberland Advisors acquisitions, and the absence of merger related expenses associated with the William Penn acquisition that were recognized in the prior period.

Mid Penn's earnings for the six months ended June 30, 2026 were $30.4 million, or $1.23 per basic common share and $1.22 per diluted common share, compared to earnings of $18.5 million, or $0.90 per basic common share, and $0.89 per diluted common share for the six months ended June 30, 2025.

MID PENN BANCORP, INC.

◦ Deposit Growth - Total deposits increased $756.3 million, or 14.5%, from $5.2 billion at December 31, 2025, to $6.0 billion at March 31, 2026.

The growth was primarily driven by the acquisition of 1st Colonial, which contributed to an increase of $528.3 million in interest-bearing transaction accounts, an increase of $128.5 million in time deposits, and a $99.5 million increase in non-interest bearing accounts.

• Asset Quality - ACL as of March 31, 2026 was $41.1 million, or 0.75% of total loans, as compared to $36.1 million, or 0.74% of total loans as of December 31, 2025.

This increase includes the initial allowance recorded for 1st Colonial loans of $4.4 million.

◦ Net Charge-offs/Recoveries - Mid Penn had net loan charge-offs of $1.0 million and net recoveries of $3 thousand for the three months ended March 31, 2026 and 2025, respectively.

◦ Non-performing assets - Total non-performing assets were $38.1 million at March 31, 2026, an increase compared to non-performing assets of $30.8 million at December 31, 2025.

The increase during the first quarter of 2026 is primarily related to the addition of $7.4 million of nonaccrual loans from the 1st Colonial acquisition .

Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.70% at March 31, 2026, compared to 0.69% as of December 31, 2025.

◦ Provision/Benefit for credit losses - loans - The provision for credit losses - loans was $1.6 million for the three months ended March 31, 2026 compared to a provision of $321 thousand for the same period of 2025.

The benefit for credit losses on off-balance sheet credit exposures was $54 thousand for the three months ended March 31, 2026, compared to a benefit of $20 thousand for the same period of 2025.

The increase in provision for the three months ended March 31, 2026, was primarily driven by qualitative adjustments to the CRE owner-occupied portfolio, reflecting growth within that segment, offset by decreases due to higher prepayment speeds and a favorable economic forecast.

• Noninterest Income - Noninterest income totaled $9.6 million for the three months ended March 31, 2026 compared to $5.2 million for the same period of 2025.

The increase is primarily driven by a $2.5 million increase in fiduciary and wealth management income, a $431 thousand increase in earnings from the cash surrender value of life insurance, a $1.3 million increase in other noninterest income, including a $558 thousand increase in death benefits received, and a $458 thousand increase in insurance commissions.

• Noninterest Expense - Noninterest expense totaled $52.0 million for the three months ended March 31, 2026, an increase of $21.3 million, or 69.6%, compared to noninterest expense of $30.6 million for the same period of 2025.

Merger and acquisition expenses increased $7.4 million to $7.7 million for the three months ended March 31, 2026, driven by $7.2 million related to the 1st Colonial acquisition, $544 thousand related to the Cumberland Advisors acquisition, compared to $314 thousand in the same period of 2025.

Salaries and benefits increased $7.0 million for the three months ended March 31, 2026, compared to the same period in 2025.

The increase is attributable to (i) the retail staff additions at the twelve retail locations added through the William Penn acquisition and three retail locations added through the 1st Colonial acquisition;

(ii) the retention of various William Penn and 1st Colonial team members through the completion of systems integrations;

and (iii) the addition of staff members from the Cumberland Advisors acquisition.

Software licensing and utilization costs increased $1.0 million for the three months ended March 31, 2026, compared to the same period in 2025.

The increase reflects additional costs to (i) license the additional William Penn and 1st Colonial branches;

and (ii) upgrade 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 $979 thousand for the three months ended March 31, 2026, compared to the same period in 2025.

The increase was driven by the facility operating costs of the additional retail locations added through the William Penn, 1st Colonial, and Cumberland Advisors acquisitions.

◦ Net Interest Margin - For the second quarter of 2026, Mid Penn’s net interest margin was 4.06% versus 3.44% for the same period of 2025.

For the six months ended June 30, 2026, net interest margin was 3.94% versus 3.41% for the same period of 2025.

The yield on interest-earning assets for the three months ended June 30, 2026 increased 30 basis points from the same period of 2025.

The rate on interest-bearing liabilities decreased 41 basis points from the same period of 2025.

The increase, compared to the second quarter of 2025, was driven by higher loan and investment securities yields, and a reduction in the cost of funds.

◦ Loan Growth - Total loans, net of unearned income, as of June 30, 2026 were $5.6 billion compared to $4.9 billion as of December 31, 2025, an increase of $754.3 million, or 15.5%.

The increase was primarily driven by the 1st Colonial acquisition and organic growth, which contributed to an increase in residential mortgage loans of $336.2 million, an increase in nonowner occupied commercial real estate of $235.8 million, an increase in owner occupied commercial real estate of $112.1 million, a $26.9 million increase in multifamily loans, a $22.7 million increase in construction loans, and an increase in commercial and industrial loans of $8.4 million.

◦ Deposit Growth - Total deposits increased $738.6 million, or 14.2%, from $5.2 billion at December 31, 2025, to $6.0 billion at June 30, 2026.

The growth was primarily driven by the acquisition of 1st Colonial, which contributed to an increase of $470.4 million in interest-bearing transaction accounts, an increase of $139.4 million in noninterest-bearing accounts, and an increase of $128.9 million in time deposits.

• Asset Quality - ACL as of June 30, 2026 was $41.6 million, or 0.74% of total loans, as compared to $36.1 million, or 0.74% of total loans as of December 31, 2025.

The increase primarily reflects the initial allowance recorded for 1st Colonial loans of $4.4 million.

◦ Net Charge-offs/Recoveries - Mid Penn had net loan charge-offs of $22 thousand and $811 thousand for the three months ended June 30, 2026 and 2025, respectively.

For the six months ended June 30, 2026, net loan charge-offs were $1.1 million compared to $808 thousand for the same period of 2025.

◦ Nonperforming assets - Total nonperforming assets were $36.8 million at June 30, 2026, an increase compared to nonperforming assets of $30.8 million at December 31, 2025.

The increase during the second quarter of 2026 is primarily related to the addition of $7.4 million of nonaccrual loans from the 1st Colonial acquisition, partially offset by the payoff of one commercial real estate loan with a balance of $1.3 million.

Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.71% at June 30, 2026, compared to 0.69% and 0.58% as of December 31, 2025 and June 30, 2025, respectively.

◦ Provision/Benefit for credit losses - loans - The provision for credit losses - loans was $557 thousand for the three months ended June 30, 2026 compared to a provision of $2.2 million for the same period of 2025.

The benefit for credit losses on off-balance sheet credit exposures was $29 thousand for the three months ended June 30, 2026, compared to a provision of $24 thousand for the same period of 2025.

The decrease in provision for the three months ended June 30, 2026, was primarily driven by qualitative adjustments to the CRE owner-occupied portfolio and improved macroeconomic assumptions, offset by an increase in reserve on one individually analyzed C&I loan.

The provision for credit losses on loans was $2.2 million for the six months ended June 30, 2026, a decrease of $361 thousand compared to the provision for credit losses of $2.6 million for the six months ended June 30, 2025.

The decrease for the six months ended June 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 $29 thousand and $83 thousand for the three and six months ended June 30, 2026, respectively.

MID PENN BANCORP, INC.

• Liquidity - Current liquidity, including cash equivalents and borrowing capacity totaled $1.5 billion, compared to $1.7 billion at December 31, 2025, representing 144.8% of uninsured and uncollateralized deposits and approximately 25.0% of total deposits.

• Noninterest Income - Noninterest income totaled $10.6 million for the three months ended June 30, 2026 compared to $6.1 million for the same period of 2025.

The increase is primarily due to a $2.5 million increase in fiduciary and wealth management, reflecting the Cumberland Advisors acquisition, a $550 thousand increase in earnings from the cash surrender value of life insurance, a $443 thousand increase in mortgage banking, a $211 thousand increase in ATM debit card interchange fees, and a $690 thousand increase in other noninterest income.

Noninterest income totaled $20.2 million for the six months ended June 30, 2026 compared to $11.4 million for the same period of 2025.

The increase in noninterest income was primarily driven by a $5.0 million increase in fiduciary and wealth management income, reflecting the acquisition of Cumberland Advisors, a $981 thousand increase in earnings from the cash surrender value of life insurance, and a $2.0 million increase in other noninterest income, including a $653 thousand increase in insurance commissions, and a $558 thousand increase in death benefits received.

• Noninterest Expense - Noninterest expense totaled $47.8 million for the three months ended June 30, 2026, a decrease of $31 thousand, or 0.1%, compared to noninterest expense of $47.8 million for the same period of 2025.

Salaries and employee benefits increased $6.2 million due to the addition of 1st Colonial and Cumberland Advisors, legal and professional fees increased $1.2 million, intangible amortization increased $1.1 million, and software licensing and utilization costs increased $883 thousand, partially offset by a decrease of $10.9 million in merger and acquisition expense related to the William Penn acquisition in 2025.

Noninterest expense totaled $99.7 million for the six months ended June 30, 2026 compared to $78.4 million for the same period of 2025.

The increase was primarily driven by a $13.2 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 $1.9 million, $1.5 million, and $2.0 million, respectively, primarily reflecting Mid Penn's increased size and operational complexity following these acquisitions.

Intangible amortization also increased $1.9 million.

These increases were partially offset by a $3.5 million decrease in merger and acquisition expenses compared to the same period of 2025.

• Liquidity - Current liquidity, including cash equivalents and borrowing capacity, totaled $1.7 billion compared to $1.5 billion at March 31, 2026, representing 142.5% of uninsured and uncollateralized deposits and approximately 28.6% of total deposits.

MID PENN BANCORP, INC.

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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 area that requires the most subjective and complex judgments.

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.

Changes in key assumptions, including economic conditions and other inputs used in these estimates, could have a material impact on the Corporation's results of operations and financial condition.

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Interest and average rates in the table below are presented on a fully taxable-equivalent basis ("FTE").

Tax-equivalent adjustments were calculated using a statutory corporate tax rate of 21% for the three months ended March 31, 2026 and 2025.

Tax-equivalent adjustments were calculated using a statutory corporate tax rate of 21% for the three and six months ended June 30, 2026 and 2025.

MID PENN BANCORP, INC.

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For the Three Months Ended

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

(Dollars in thousands) Average Balance Interest Yield/

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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 March 31, 2026 in comparison to the same period in 2025:

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 June 30, 2026 in comparison to the same period in 2025:

Three Months Ended

March 31, 2026 vs.

March 31, 2025

June 30, 2026 vs.

June 30, 2025

Increase (decrease)

22 unchanged sentences

NET INTEREST INCOME $ 10,199 $ 6,875 $ 17,074

For the three months ended March 31, 2026, net interest income was $55.3 million compared to net interest income of $42.5 million for the three months ended March 31, 2025.

The tax-equivalent net interest margin for the three months ended March 31, 2026 was 3.80% compared to 3.37% for the first quarter of 2025, representing a 43 bp increase compared to the same period in 2025.

The yield on interest-earning assets increased to 5.75% for the quarter ended March 31, 2026, from 5.65% for the quarter ended March 31, 2025.

These increases were due to assets continuing to reprice at higher rates during 2025 and the first quarter of 2026, continued discipline on new loan pricing, and an increase in Fed funds sold.

Average investment securities increased $144.2 million and the yield on those investment securities increased 56 bps during the first quarter of 2026 compared to the first quarter of 2025, increasing interest income due to volume by $1.1 million, and increasing interest income due to rates by $1.0 million.

Average loans increased $623.6 million, and the yield on those loans increased 8 bps, contributing $9.3 million and $958 thousand, respectively, to the increase in interest income.

Interest expense decreased $559 thousand during the first quarter of 2026 compared to the first quarter of 2025.

The rate of interest-bearing liabilities decreased from 2.95% for the first quarter of 2025 to 2.51% for the first quarter of 2026.

For the three months ended June 30, 2026, net interest income was $65.3 million compared to net interest income of $48.2 million for the three months ended June 30, 2025.

The tax-equivalent net interest margin for the three months ended June 30, 2026 was 4.06% compared to 3.44% for the second quarter of 2025, representing a 62 bp increase compared to the same period in 2025.

The yield on interest-earning assets increased to 5.99% for the quarter ended June 30, 2026 from 5.69% for the quarter ended June 30, 2025.

These increases were primarily due to continued repricing of assets at higher rates during the second quarter of 2026 compared to the second quarter of 2025, continued discipline on new loan pricing, and an increase in Fed funds sold.

Average investment securities increased $191.2 million and the yield on those investment securities increased 55 bps during the second quarter of 2026 compared to the second quarter of 2025, increasing interest income due to volume by $1.5 million, and increasing interest income due to rates by $1.1 million.

Average loans increased $863.5 million, and the yield on those loans increased 21 bps, contributing $13.2 million and $2.9 million, respectively, to the increase in interest income.

Interest expense decreased $402 thousand during the second quarter of 2026 compared to the second quarter of 2025.

The rate of interest-bearing liabilities decreased from 2.89% for the second quarter of 2025 to 2.48% for the second quarter of 2026.

The decrease in the average rate was primarily attributable to lower rates paid on interest-bearing deposits following

MID PENN BANCORP, INC.

decrease in the rate was primarily a result of a decrease in short-term borrowings, a decrease in long term debt, and a decrease in time deposits.

Federal Reserve rate cuts in 2025, lower rates on short term borrowings, and lower long-term debt.

Mid Penn continued to offer higher rates over the comparable period to both retain and attract deposits.

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In addition, our net interest income may be impacted by further interest rate actions of the Federal Reserve’s FOMC.

MID PENN BANCORP, INC.

Average Balances, Income and Interest Rates on a Taxable-Equivalent Basis

For the Six Months Ended June 30,

(Dollars in thousands) Average Balance Interest Yield/

Rate Average Balance Interest Yield/

Interest Bearing Balances $ 19,356 $ 227 2.36 % $ 22,039 $ 280 2.56 %

Investment Securities:

Taxable 751,543 13,697 3.68 577,401 8,879 3.10

Tax-exempt 62,164 581 1.88 68,476 692 2.04

Total Investment Securities 813,707 14,278 3.54 645,877 9,571 2.99

Federal funds sold 14,357 378 5.31 130,482 2,689 4.16

Loans, net of unearned income 5,337,080 165,375 6.25 4,592,890 139,006 6.10

Restricted investment in bank stocks 11,582 360 6.27 7,022 218 6.26

Total Interest-earning Assets 6,196,082 180,618 5.88 5,398,310 151,764 5.67

Cash and Due from Banks 55,452 45,175

Other Assets 444,216 321,923

Total Assets $ 6,695,750 $ 5,765,408

LIABILITIES & SHAREHOLDERS' EQUITY:

Interest-bearing Demand $ 1,522,053 $ 12,129 1.61 % $ 1,087,426 $ 9,635 1.79 %

Money market 1,230,277 15,308 2.51 1,103,745 15,291 2.79

Savings 398,950 1,011 0.51 284,428 124 0.09

Time 1,624,228 30,019 3.73 1,662,891 34,195 4.15

Total Interest-bearing Deposits 4,775,508 58,467 2.47 4,138,490 59,245 2.89

Short-term borrowings 75,517 1,467 3.92 16,106 376 4.71

Long-term debt 7,285 155 4.29 23,475 509 4.37

Subordinated debt — — — 45,462 919 4.08

Total Interest-bearing Liabilities 4,858,310 60,089 2.49 4,223,533 61,049 2.91

Noninterest-bearing Demand 892,547 783,561

Other Liabilities 76,379 92,560

Shareholders' Equity 868,514 665,754

Total Liabilities & Shareholders' Equity $ 6,695,750 $ 5,765,408

Net Interest Income $ 120,529 $ 90,715

Taxable Equivalent Adjustment (1) 467 487

Net Interest Income (taxable-equivalent basis) $ 120,996 $ 91,202

Total Yield on Earning Assets 5.88 % 5.67 %

Rate on Supporting Liabilities 2.49 2.91

Average Interest Spread 3.38 2.75

Net Interest Margin (1) 3.94 3.41

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

(2) Annualized ratios.

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 six months ended June 30, 2026 in comparison to the same period in 2025:

Six Months Ended

June 30, 2026 vs.

June 30, 2025

(In thousands) Increase (decrease)

Volume Rate Net

INTEREST INCOME:

Interest Bearing Balances $ (34) $ (19) $ (53)

Investment Securities:

Taxable 2,678 2,140 4,818

Tax-exempt (64) (47) (111)

Total Investment Securities 2,614 2,093 4,707

Federal funds sold (2,393) 82 (2,311)

Loans, net of unearned income 22,523 3,846 26,369

Restricted investment in bank stocks 142 — 142

Total Interest Income 22,852 6,002 28,854

INTEREST EXPENSE:

Interest-Bearing Deposits:

Interest-bearing demand 3,851 (1,357) 2,494

Money market 1,753 (1,736) 17

Savings 50 837 887

Time (795) (3,381) (4,176)

Total Interest-Bearing Deposits 4,859 (5,637) (778)

Short-term borrowings 1,154 (63) 1,091

Long-term debt (351) (3) (354)

Subordinated debt (919) — (919)

Total Interest Expense 4,743 (5,703) (960)

NET INTEREST INCOME $ 18,109 $ 11,705 $ 29,814

For the six months ended June 30, 2026, net interest income was $120.5 million compared to net interest income of $90.7 million for the six months ended June 30, 2025.

FTE net interest income was $121.0 million for the six months ended June 30, 2026, an increase of $29.8 million, or 32.7%, compared to the same period in 2025.

The tax-equivalent net interest margin for the six months ended June 30, 2026 was 3.94% compared to 3.41% for the same period in 2025, representing a 53 bp increase, primarily reflecting lower funding costs from the repricing of interest-bearing deposits and short-term borrowings, as well as lower long-term debt balances.

The higher yields and the growth in interest-earning assets contributed $22.9 million and $6.0 million, respectively, to the increase in interest income.

The yield on interest-earning assets increased 21 bps to 5.88% for the six months ended June 30, 2026 compared to 5.67% for the same period of 2025.

Average interest-earning assets increased $22.4 million, or 14.8%, during the six months ended June 30, 2026 compared to the same period of 2025.

Average investment securities increased $167.8 million, or 26.0%, and the yield on those investment securities increased 55 bps during the six months ended June 30, 2026, contributing $2.6 million and $2.1 million, respectively, to interest income.

Average loans increased $744.2 million, and the yield on those loans increased 15 bps, contributing $22.5 million and $3.8 million, respectively, to the increase in interest income.

Interest expense decreased $1.0 million during the first six months of 2026 compared to the same period of 2025.

The rate on interest-bearing liabilities decreased from 2.91% for the first six months of 2025 to 2.49% for the first six months of

MID PENN BANCORP, INC.

The decrease in the average rate primarily reflected the repricing of interest-bearing deposits and short term borrowings, as well as lower long term debt balances.

Mid Penn continued to offer competitive deposit rates to retain and attract customer deposits.

The average rate paid on interest-bearing deposits decreased 42 bps, during the six months ended June 30, 2026, compared to the same period in 2025, reducing interest expense by $5.6 million.

Provision for Credit Losses - Loans

The provision for credit losses on loans was $1.6 million for the three months ended March 31, 2026 compared to a provision of $321 thousand for the three months ended March 31, 2025.

The increase in provision was primarily attributable to qualitative adjustments to several segments of the portfolio, offset by reductions due to a favorable economic forecast.

The provision for credit losses on loans was $557 thousand for the three months ended June 30, 2026 compared to a provision of $2.2 million for the three months ended June 30, 2025.

The decrease in provision was primarily driven by the Day 1 allowance on William Penn loans acquired on April 30, 2025.

This amount reflects accounting guidance in effect prior to Mid Penn's adoption of ASU 2025-08, under which the allowance for certain purchased loans was recognized through the provision for credit losses.

The provision for credit losses on loans was $2.2 million for the six months ended June 30, 2026 compared to a provision of $2.6 million for the same period in 2025.

The decrease for the six months ended June 30, 2026 was primarily attributable to improved macroeconomic assumptions, partially offset by higher qualitative adjustments across several segments of the portfolio.

Noninterest Income

For the three months ended March 31, 2026, noninterest income totaled $9.6 million, a increase of $4.4 million, or 83.3%, compared to noninterest income of $5.2 million for the three months ended March 31, 2025.

The increase was largely driven by a $2.5 million increase in fiduciary and wealth management income, a $431 thousand increase in earnings from the cash surrender value of life insurance, a $1.3 million increase in other noninterest income, including a $558 thousand increase in death benefits received, and a $458 thousand increase in insurance commissions.

For the three months ended June 30, 2026, noninterest income totaled $10.6 million, an increase of $4.4 million, or 72.3%, compared to noninterest income of $6.1 million for the three months ended June 30, 2025.

The increase is primarily due to a $2.5 million increase in fiduciary and wealth management, reflecting the Cumberland Advisors acquisition, a $550 thousand increase in earnings from the cash surrender value of life insurance, a $443 thousand increase in mortgage banking, and a $690 thousand increase in other noninterest income.

The following table and explanations that follow provide additional analysis of noninterest income:

Three Months Ended March 31,

Three Months Ended June 30,

(Dollars in thousands) 2026 2025 $ Variance % Variance

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Mortgage banking 1,119 676 443 65.5

Mortgage hedging 81 (9) 90 N/M

Mortgage hedging 113 (7) 120 (1714.3)

Net gain on sales of SBA loans 27 63 (36) (57.1)

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Total $ 10,586 $ 6,143 $ 4,443 72.3 %

Noninterest Expense

For the three months ended March 31, 2026, noninterest expense totaled $52.0 million, an increase of $21.3 million, or 69.6%, compared to noninterest expense of $30.6 million for the same period in 2025.

The increase was primarily driven by a $7.4 million increase in merger and acquisition expenses, a $7.0 million increase in salaries and employee benefits, a $1.0 million increase in software licensing, a $979 thousand increase in occupancy expenses, an $872 thousand increase in intangible amortization, an $862 thousand increase in legal and professional fees, and a $2.3 million increase in other noninterest expense, primarily driven by a $1.5 million increase related to a change in methodology for LIHTC amortization, and a $665 thousand in legal settlements.

For the six months ended June 30, 2026, noninterest income totaled $20.2 million, an increase of $8.8 million, or 77.4%, compared to noninterest income of $11.4 million for the six months ended June 30, 2025.

The increase was primarily driven by a $5.0 million increase in fiduciary and wealth management income, reflecting the Cumberland Advisors acquisition, a $981 thousand increase in earnings from the cash surrender value of life insurance, a $2.0 million increase in other noninterest income, including a $653 thousand increase in insurance commissions, and a $558 thousand increase in death benefits received.

MID PENN BANCORP, INC.

Six Months Ended June 30,

(Dollars in thousands) 2026 2025 $ Variance % Variance

Fiduciary and wealth management $ 7,552 $ 2,546 $ 5,006 196.6 %

ATM debit card interchange 2,204 1,877 327 17.4

Service charges on deposits 1,268 1,214 54 4.4

Mortgage banking 1,432 1,267 165 13.0

Mortgage hedging 193 (16) 209 (1306.3)

Net gain on sales of SBA loans 190 120 70 58.3

Earnings from cash surrender value of life insurance 1,746 765 981 128.2

Other 5,605 3,609 1,996 55.3

Total $ 20,190 $ 11,382 $ 8,808 77.4 %

Noninterest Expense

For the three months ended June 30, 2026, noninterest expense totaled $47.8 million, a decrease of $31 thousand, or 0.1%, compared to noninterest expense of $47.8 million for the same period in 2025.

The decrease was primarily driven by a $10.9 million decrease in merger and acquisition expenses, partially offset by a $6.2 million increase in salaries and employee benefits, a $1.2 million increase in legal and professional fees, a $1.1 million increase in intangible amortization, a $883 thousand increase in software licensing, and a $526 thousand increase in occupancy expenses.

The following table and explanations that follow provide additional analysis of noninterest expense:

Three Months Ended March 31,

Three Months Ended June 30,

(Dollars in thousands) 2026 2025 $ Variance % Variance

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FDIC Assessment 663 994 (331) (33.3)

Loss on sale of foreclosed assets, net 4 — 4 —

Merger and acquisition expense 103 11,011 (10,908) (99.1)

Other expenses 5,835 5,191 644 12.4

Total Noninterest Expense $ 47,767 $ 47,798 $ (31) (0.1 %)

For the six months ended June 30, 2026, noninterest expense totaled $99.7 million, an increase of $21.3 million, or 27.1%, compared to noninterest expense of $78.4 million for the six months ended June 30, 2025.

The increase was primarily driven by a $13.2 million increase in salaries and benefits, reflecting additional staff from the William Penn, 1st Colonial, and Cumberland Advisors acquisitions.

Intangible amortization also increased $1.9 million.

These increases were partially offset by a $3.5 million decrease in merger and acquisition expenses compared to the same period of 2025.

MID PENN BANCORP, INC.

Six Months Ended June 30,

(Dollars in thousands) 2026 2025 $ Variance % Variance

Salaries and employee benefits $ 50,291 $ 37,062 $ 13,229 35.7 %

Software licensing and utilization 7,756 5,846 1,910 32.7

Occupancy expense, net 6,145 4,639 1,506 32.5

Equipment expense 3,237 2,342 895 38.2

Shares tax 1,786 1,525 261 17.1

Legal and professional fees 3,846 1,819 2,027 111.4

ATM/card processing 1,446 1,354 92 6.8

Intangible amortization 3,119 1,172 1,947 166.1

FDIC Assessment 1,463 1,984 (521) (26.3)

Loss/(gain) on sale of foreclosed assets, net 495 (28) 523 N/M

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Total Noninterest Expense $ 99,725 $ 78,440 $ 21,285 27.1 %

The provision for income taxes was $2.6 million for the three months ended March 31, 2026 compared to $3.1 million for the same period in 2025.

The provision for income taxes for the three months ended March 31, 2026 reflects a combined Federal and State effective tax rate of 23.0% for the three months ended March 31, 2026, compared to 18.2%, for the three months ended March 31, 2025.

The provision for income taxes was $5.9 million for the three months ended June 30, 2026 compared to a benefit of $480 thousand for the same period in 2025.

The provision for income taxes was $8.5 million and $2.6 million for the six months ended June 30, 2026 and 2025, respectively.

The provision for income taxes for the six months ended June 30, 2026 and 2025 reflects a combined Federal and State effective tax rate of 21.8% and 12.2%, 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.

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1, the “One Big Beautiful Bill Act,” into law.

The legislation includes several changes to federal tax law that may affect the Company in future periods, including provisions related to business deductions and tax depreciation.

These changes did not have a material impact on the Corporation’s federal income tax expense or liability for the three months ended March 31, 2026.

The legislation includes several changes to federal tax law that may affect the Corporation in future periods, including provisions related to business deductions and tax depreciation.

These changes did not have a material impact on the Corporation’s federal income tax expense or liability for the three and six month periods ended June 30, 2026.

Financial Condition

Mid Penn’s total assets were $7.0 billion as of March 31, 2026, reflecting an increase of $830.9 million, or 13.5%, compared to total assets of $6.1 billion as of December 31, 2025.

The increase was primarily driven by an increase in loans as a result of the 1st Colonial acquisition, an increase in available for sale investment securities, and an increase in Fed Funds Sold.

Mid Penn’s total assets were $7.1 billion as of June 30, 2026, reflecting an increase of $929.0 million, or 15.1%, compared to total assets of $6.1 billion as of December 31, 2025.

The increase was primarily driven by an increase in loans as a result of the 1st Colonial acquisition, and an increase in investment securities, partially offset by a decrease 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 March 31, 2026 were $825.1 million compared to $763.6 million as of December 31, 2025.

The carrying value of total investment securities as of June 30, 2026 was $872.6 million compared to $763.6 million as of December 31, 2025.

Mid Penn does not anticipate growth in the investment portfolio beyond levels necessary to support pledging requirements.

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Thru Ten Years After Ten

As of March 31, 2026 Amount Weighted-Average Yield Amount Weighted-Average Yield Amount Weighted-Average Yield Amount Weighted-Average Yield Amount Weighted-Average Yield

As of June 30, 2026 Amount Weighted-Average Yield Amount Weighted-Average Yield Amount Weighted-Average Yield Amount Weighted-Average Yield Amount Weighted-Average Yield

Available-for-sale securities, at fair value:

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Loans, net of unearned income

Total loans, net of unearned income, as of March 31, 2026 were $5.5 billion compared to $4.9 billion as of December 31, 2025.

The growth of $647.1 million, or 13.3%, since December 31, 2025 was primarily driven by the acquisition of 1st Colonial, which contributed to an increase in residential mortgages of $341.1 million, an increase in commercial real estate loans of $245.7 million, an increase in construction loans of $57.7 million, and an increase in commercial and industrial loans of $4.9 million.

Total loans, net of unearned income, as of June 30, 2026 were $5.6 billion compared to $4.9 billion as of December 31, 2025.

The growth of $754.3 million, or 15.5%, since December 31, 2025 was primarily driven by the acquisition of 1st Colonial, which contributed to an increase in commercial real estate loans of $387.5 million, an increase in residential mortgages of $336.2 million, an increase in construction loans of $22.7 million, and an increase in commercial and industrial loans of $8.4 million.

MID PENN BANCORP, INC.

March 31, 2026 December 31, 2025 Change in Balance

June 30, 2026 December 31, 2025 Change in Balance

(Dollars in thousands) Balance % of Total Loans Balance % of Total Loans $ %

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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, 2026 December 31, 2025

(Dollars in thousands) June 30, 2026 December 31, 2025

Commercial Real Estate Balance % of portfolio Weighted-Average LTV (2)

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(In thousands)

As of March 31, 2026 One Year

As of June 30, 2026 One Year

and Less One to

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Total loans held in portfolio $ 605,400 $ 1,400,832 $ 1,572,137 $ 2,038,800 $ 5,617,169

MID PENN BANCORP, INC.

Fixed interest rates:

MID PENN BANCORP, INC.

Commercial real estate

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Three Months Ended

June 30, Six Months Ended

(Dollars in thousands) 2026 2025 2026 2025

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Recoveries of loans previously charged off 39 98 143 116

Net (charge-offs)/recoveries (1,049) 3

(Benefit)/provision for credit losses - loans (1)

Net charge-offs (22) (811) (1,071) (808)

Provision for credit losses - loans (1)(2)

557 2,245 2,205 2,566

Balance, end of period $ 41,640 $ 37,615 $ 41,640 $ 37,615

Ratio of net charge-offs/(recoveries) to average loans outstanding (annualized) 0.084 % (0.0003) %

Ratio of net charge-offs to average loans outstanding (annualized) 0.002 % 0.069 % 0.040 % 0.035 %

Ratio of ACL - loans to net loans at end of period 0.74 % 0.78 % 0.74 % 0.78 %

(1) Includes a $3.4 million initial provision related to non-PCD loans from the 1st Colonial acquisition in the second quarter of 2026 .

(2) Includes a $2.3 million initial provision related to non-PCD loans from the William Penn acquisition in the second quarter of 2025.

MID PENN BANCORP, INC.

The following table presents the change in nonperforming asset categories as of March 31, 2026, December 31, 2025, and March 31, 2025.

(Dollars in thousands) March 31, 2026 December 31, 2025 March 31, 2025

The following table presents the change in nonperforming asset categories as of June 30, 2026, December 31, 2025, and June 30, 2025.

(Dollars in thousands) June 30, 2026 December 31, 2025 June 30, 2025

Nonperforming Assets:

7 unchanged sentences

Ratio of ACL-loans to nonperforming loans 146.52 % 157.25 % 206.49 %

Total nonperforming assets were $38.1 million at March 31, 2026, an increase compared to nonperforming assets of $30.8 million at December 31, 2025.

The increase during the first quarter of 2026 is primarily driven by the addition of $7.4 million of nonaccrual loans from the 1st Colonial acquisition in the first quarter of 2026.

Delinquency, measured as loans past due 30 days or more, as a percentage of total loans was 0.70% at March 31, 2026, compared to 0.69% and 0.50% as of December 31, 2025 and March 31, 2025.

Total nonperforming assets were $36.8 million at June 30, 2026, an increase compared to nonperforming assets of $30.8 million at December 31, 2025.

The increase during the second quarter of June 30, 2026 was primarily related to the addition of $7.4 million of nonaccrual loans acquired in the 1st Colonial acquisition, partially offset by payoffs and paydowns in the second quarter of 2026.

Delinquency, measured as loans past due 30 days or more, including loans on nonaccrual status, was 0.71% of total loans at June 30, 2026, compared to 0.69% and 0.58% as of December 31, 2025 and June 30, 2025, respectively.

Mid Penn evaluates goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that impairment may be present.

Significant negative industry or economic trends, as well as changes in the Corporation's stock price, could represent potential indicators of impairment.

Management considered relevant factors, including overall market conditions, and trends in the Corporation's stock price, and concluded that no triggering events had occurred as of March 31, 2026.

Management considered relevant factors, including overall market conditions, and trends in the Corporation's stock price, and concluded that no triggering events had occurred as of June 30, 2026.

Management will continue to monitor these factors in future periods.

Mid Penn's annual impairment test is scheduled to be conducted as of October 31, 2026.

Total deposits increased $756.3 million, or 14.5%, from $5.2 billion on December 31, 2025, to $6.0 billion at March 31, 2026.

Total deposits increased $738.6 million, or 14.2%, from $5.2 billion on December 31, 2025, to $6.0 billion at June 30, 2026.

The growth was primarily driven by the acquisition of 1st Colonial deposits of $747.1 million.

These deposits contributed to a $528.3 million increase in interest bearing accounts, $128.5 million increase in time deposits, and a $99.5 million increase in noninterest bearing accounts.

These deposits contributed to a $470.4 million increase in interest-bearing accounts, a $139.4 million increase in noninterest-bearing accounts, and a $128.9 million increase in time deposits.

MID PENN BANCORP, INC.

Average balances and average interest rates applicable to deposits by major classification:

March 31, 2026 December 31, 2025 Change

June 30, 2026 December 31, 2025 Change

(Dollars in thousands) Balance Rate Balance Rate $ %

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$ 5,668,055 2.08 % $ 5,152,590 2.36 % $ 515,465 10.00 %

As of March 31, 2026, uninsured deposits were approximately $1.0 billion, or 17.3% of total deposits, compared to $1.0 billion, or 19.2% of total deposits, as of December 31, 2025.

The maturities of the uninsured time deposits as of March 31, 2026 were as follows:

As of June 30, 2026, uninsured deposits were approximately $1.2 billion, or 20.0% of total deposits compared to $1.0 billion, or 19.2%, of total deposits as of December 31, 2025.

The maturities of the uninsured time deposits as of June 30, 2026 were as follows:

(In thousands) 2026

3 unchanged sentences

Over twelve months 22,381

Total short-term borrowings increased $10.7 million, or 51.2%, from December 31, 2025 to March 31, 2026.

Total short-term borrowings increased $116.7 million, or 560.0%, from December 31, 2025 to June 30, 2026.

The increase in short-term borrowings was driven by our objective to maintain a strong level of unencumbered liquid assets, ensuring the availability of high-quality liquidity to meet potential near-term obligations.

Total long-term borrowings were $3.0 million at March 31, 2026, a decrease of $20.1 million from December 31, 2025.

Total long-term borrowings were $2.9 million at June 30, 2026, a decrease of $20.2 million from December 31, 2025.

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.

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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

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.

MID PENN BANCORP, INC.

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, 2026 provided $14.5 million of cash, mainly due to net income.

Cash provided in investing activities during the three months ended March 31, 2026 was $33.9 million, mainly the result of the Cumberland Advisors and 1st Colonial acquisitions.

Cash used by financing activities during the three months ended March 31, 2026 totaled $6.1 million, primarily the result of the repayment of long-term borrowings.

Mid Penn’s operating activities during the six months ended June 30, 2026 provided $46.8 million in cash, mainly due to net income.

Cash used in investing activities during the six months ended June 30, 2026 was $133.1 million, mainly the result of a net increase in loans.

Cash provided by financing activities during the six months ended June 30, 2026 totaled $73.9 million, primarily the result of a net decrease in deposits and proceeds from short-term borrowings.

Regulatory Capital

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

March 31, 2026 December 31, 2025 Regulatory Minimum for Capital Adequacy

June 30, 2026 December 31, 2025 Regulatory Minimum for Capital Adequacy

Total Risk-Based Capital (to Risk-Weighted Assets) 13.53 % 14.32 % 10.50 %

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Tier I Leverage Capital (to Average Assets) 10.66 11.02 4.00

As of March 31, 2026 and December 31, 2025, 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.

As of June 30, 2026 and December 31, 2025, 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.

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Accordingly, capital management practices have been, and will continue to be, of paramount importance to Mid Penn.

Shareholders’ equity increased by $73.3 million, or 9.0%, from $814.1 million as of December 31, 2025 to $887.4 million as of March 31, 2026, reflecting common stock issued in connection with the 1st Colonial and Cumberland Advisors acquisitions totaling $69.6 million and earnings of $8.7 million, partially offset by dividends paid of $6.2 million.

Shareholders’ equity increased by $87.8 million, or 10.8%, from $814.1 million as of December 31, 2025 to $901.9 million as of June 30, 2026, reflecting common stock issued in connection with the 1st Colonial and Cumberland Advisors acquisitions totaling $69.6 million and earnings of $30.4 million, partially offset by dividends paid of $6.2 million.

MID PENN BANCORP, INC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis