Mid Penn Bancorp, Inc. (NASDAQ: MPB) ("Mid Penn"), the parent
company of Mid Penn Bank (the "Bank") and MPB Financial Services,
LLC, today reported net income available to common shareholders
("earnings") for the quarter ended June 30, 2024, of $11.8 million,
or $0.71 per diluted common share, compared to net income of $4.8
million, or $0.29 per diluted common share, for the second quarter
of 2023 and consensus estimate of $0.60 per diluted common
share.
Key Highlights of the Second Quarter of 2024:
- Net income available to common shareholders increased 143.4% to
$11.8 million, or $0.71 per diluted common share, for the second
quarter of 2024, compared to net income of $4.8 million, or $0.29
per diluted common share, for the second quarter of 2023. Net
income for the six months ended June 30, 2024, increased 48.82% to
$23.9 million, or $1.44 per diluted common share, compared to $16.1
million for the six months ended June 30, 2023, or $1.00 per
diluted common share.
- Loan growth for the second quarter of 2024 was $47.1 million,
or 4.4% (annualized), as the Bank continued to execute on its
restrained growth strategy in 2024. Total loans increased $330.1
million, or 8.18%, compared to the second quarter of 2023.
- Deposits increased $122.6 million, or 11.3% (annualized),
during the second quarter of 2024, compared to $32.9 million, or
3.0% (annualized), during the first quarter of 2024. The increase
was driven by a $112.1 million increase in interest bearing
accounts, and a $47.7 million increase in time deposits.
- Net interest margin increased to 3.12% for the quarter ended
June 30, 2024, compared to 2.97% for the first quarter of 2024.
Cost of funds held steady at 2.74%, compared to 2.71% for the first
quarter of 2024, as the Bank continued to experience strong core
deposit growth.
- Book value per common share improved to $33.76 for the quarter
ended June 30, 2024, compared to $33.26 and $31.74 for the periods
ended March 31, 2024 and June 30, 2023, respectively. Tangible book
value per common share improved to $25.75 for the quarter ended
June 30, 2024, compared to $25.23 and $23.62 for the periods ended
March 31, 2024 and June 30, 2023, respectively. (1)
- Nonperforming assets decreased $5.1 million, or 33%, compared
to the first quarter of 2024. The decrease was primarily due to the
sale of one foreclosed property, which resulted in a loss on sale
of approximately $26 thousand.
- The Board of Directors declared a cash dividend of $0.20 per
common share, payable August 26, 2024, to shareholders of record as
of August 9, 2024.
(1) Non-GAAP financial measure. Refer to the calculation on the
section titled “Reconciliation of Non-GAAP Measures” at the end of
this document.
“We are pleased to announce the results of our second quarter,
detailed within this earnings release, as they are virtually in
lockstep with what we have been signaling over the last nine
months. That signal has included restrained loan growth, a focus on
core deposit growth and a restraint on noninterest expenses,”
Chair, President and CEO Rory G. Ritrievi said. “Within this second
quarter, our organic loan growth annualized to 4.4%, which is
substantially less than the typical double-digit organic loan
growth we have experienced in most of our 15+ years together.
Through the first six months of 2024, the organic loan growth rate
is just over 5% annualized, which falls right at the level we had
signaled coming into the year.”
Ritrievi continued, “In organic deposit growth, the second
quarter exceeded expectations. Within the quarter, we grew deposits
on an annualized basis of over 11%, which puts us at over 7%
annualized growth through the first six months of the year. Again,
this is right in line with our plan. Core deposit growth has always
been a calling card of Mid Penn over our 15 years together and it
is great to see that back on track after a challenging 2023. The
combination of restrained loan growth and significant core deposit
growth helped us to not only stabilize but also grow our net
interest margin within the quarter. That is the first such
quarterly growth in that metric since rates began to escalate and
the interest rate curve became inverted in 2022.”
“From a noninterest expense standpoint, we decreased our level
of expenses within the second quarter at a rate of approximately 4%
annualized. Our second quarter 2024 expense run rate was lower than
it was in each of the previous four quarters, a great sign for
efficiency ratio improvement," Ritrievi added. "The best part of
the quarter, however, was our continued strength in asset (loan)
quality. Non performing assets decreased 33% within the quarter
while our net charge off ratio improved to 0.002% and the coverage
ratio improved to 353%. All great signs heading into the last six
months of the year.”
Ritrievi concluded, "With all of that in mind, the Board has
authorized a quarterly cash dividend of $0.20 per share of common
stock, which was declared at its meeting on July 24, 2024, payable
on August 26, 2024, to shareholders of record as of August 9, 2024,
which we feel allows us to meaningfully share our success while
retaining enough profitability to bolster capital ratios and
continue to navigate this difficult operating environment."
Net Interest Income
For the three months ended June 30, 2024, net interest income
was $38.8 million compared to net interest income of $36.5 million
for the three months ended March 31, 2024, and $36.4 million for
the three months ended June 30, 2023. The tax-equivalent net
interest margin for the three months ended June 30, 2024 was 3.12%
compared to 2.98% and 3.31% for the first quarter of 2024, and
second quarter of 2023, respectively, representing a 15 basis point
("bp") increase to the first quarter of 2024, and a 17 bp decrease
compared to the same period in 2023.
The yield on interest-earning assets increased to 5.69% for the
quarter ended June 30, 2024, from 5.51% for the three months ended
March 31, 2024, and 5.08% for the three months ended June 30, 2023.
These increases were due to assets continuing to reprice at higher
rates during the second quarter of 2024, continued discipline on
new loan pricing, and an increase in Fed funds sold.
For the six months ended June 30, 2024, net interest income
increased 3.8% to $75.2 million compared to net interest income for
the same period of 2023.
Average Balances
Average loans increased $59.5 million to $4.4 billion for the
quarter ended June 30, 2024, compared to $4.3 billion for the
quarter ended March 31, 2024, and $3.8 billion for the quarter
ended June 30, 2023. Loan growth for the second quarter of 2024 was
$47.1 million, or 4.4% (annualized) as the Bank continued to
execute on its restrained growth strategy in 2024.
Average deposits were $4.5 billion for the second quarter of
2024, reflecting an increase of $139.6 million, or 3.2%, compared
to total average deposits of $4.3 billion in the first quarter of
2024, and an increase of $394.1 million, or 9.7%, compared to total
average deposits of $4.1 billion for the second quarter of 2023.
Average balances were impacted by the acquisition of Brunswick
Bancorp in the second quarter of 2023. The average cost of deposits
was 2.57% for the second quarter of 2024, representing a 12 bp
increase and an 79 bp increase from the first quarter of 2024 and
the second quarter of 2023, respectively. The Bank continues to
face headwinds with respect to deposit pricing, given increased
interest rates and competition for deposits across all product
types. Our primary focus with respect to deposit strategy is
stability, ensuring that our rates are competitive, and our product
mix satisfies the needs of our customers. Additionally, Mid Penn
also maintains interest rate swaps to hedge the cash flows
associated with existing brokered CDs to mitigate the impact of
rising deposit costs. Cost of funds held steady at 2.74%, compared
to 2.71% for the first quarter of 2024, as the Bank continued to
experience strong deposit growth.
Deposits increased $122.6 million, or 11.3% (annualized) to $4.5
billion as of June 30, 2024, compared to $4.4 billion and $4.3
billion at March 31, 2024, and June 30, 2023, respectively. The
increase during the second quarter of 2024 was primarily related to
a $112.1 million increase in interest bearing deposits, and an
increase of $47.7 million in time deposits. Time deposits
represented 34.0% of total deposits at March 31, 2024, compared to
34.1% at June 30, 2024. The mix of non-interest-bearing deposits
decreased $30.6 million from the first quarter of 2024,
representing approximately 17.1% of total deposits at June 30,
2024, compared to 18.4% at March 31, 2024, and 19.2% at June 30,
2023. The average duration of the non-hedged time deposit portfolio
was 12 months at June 30, 2024.
Asset Quality
The total provision for credit losses, including provision for
credit losses on off-balance sheet credit exposures, was $1.6
million for the three months ended June 30, 2024, an increase of
$2.5 million compared to the benefit for credit losses of $(937)
thousand for the three months ended March 31, 2024, and a $46
thousand increase compared to the provision for credit losses of
$1.6 million for the three months ended June 30, 2023. This
increase in provision was driven by a combination of loan growth
over the quarter and forecast-driven increases in loss rates across
multiple segments of the portfolio. Net charge-offs for the three
months ended June 30, 2024, were $18 thousand or less than .001% of
total loans.
The provision for credit losses on loans was $1.2 million for
the six months ended June 30, 2024, a decrease of $484 thousand
compared to the provision for credit losses of $1.6 million for the
six months ended June 30, 2023. The decrease in provision for the
six months ended June 30, 2024, is primarily due to a decrease in
loss factors across all portfolios. The benefit for credit losses
on off-balance sheet credit exposures was $497 thousand for the six
months ended June 30, 2024. Net charge-offs for the six months
ended June 30, 2024, were $62 thousand or 0.001% of total
loans.
Allowance for credit losses - loans was 0.81% of loans, net of
unearned interest at June 30, 2024, compared to 0.78% and 0.81% at
March 31, 2024, and June 30, 2023, respectively.
Total nonperforming assets were $10.4 million at June 30, 2024,
compared to nonperforming assets of $15.5 million and $16.3 million
at March 31, 2024, and June 30, 2023, respectively. The decrease
during the second quarter of 2024 primarily related to the sale of
one large property placed in OREO in the first quarter of 2024.
Delinquency as a percentage of total loans was 0.57% at June 30,
2024.
Capital
Shareholders’ equity increased $17.3 million, or 3.2%, from
$542.4 million as of December 31, 2023 to $559.7 million as of June
30, 2024. Retained earnings increased $17.3 million, or 11.8%, from
$154.8 million as of March 31, 2024, to $163.3 million as of June
30, 2024. Regulatory capital ratios for both Mid Penn and its
banking subsidiary indicate regulatory capital levels in excess of
both the regulatory minimums and the levels necessary for the Bank
to be considered "well capitalized" at June 30, 2024. Additionally,
Mid Penn declared $3.3 million in dividends during the second
quarter of 2024.
On April 24, 2024, Mid Penn’s Board of Directors reauthorized
its treasury stock repurchase program ("Program") effective through
April 24, 2025. The Program authorizes the repurchase of up to
$15.0 million of Mid Penn’s outstanding common stock. During the
six months ended June 30, 2024, Mid Penn has repurchased 15,500
shares of common stock at an average price of $20.81. As of June
30, 2024, Mid Penn repurchased 440,722 shares of common stock at an
average price of $22.78 per share under the Program. The Program
had approximately $5.0 million remaining available for repurchase
as of June 30, 2024.
Noninterest Income
For the three months ended June 30, 2024, noninterest income
totaled $5.3 million, a decrease of $508 thousand, or 8.7%,
compared to noninterest income of $5.8 million for the first
quarter of 2024. The decrease is primarily due to a $751 thousand
decrease in other miscellaneous noninterest income, driven by a
decrease in Bank owned life insurance benefits received, partially
offset by a $204 thousand increase in mortgage banking income.
For the six months ended June 30, 2024, noninterest income
totaled $11.2 million, an increase of $1.6 million, or 17.0%,
compared to noninterest income of $9.5 million for the six months
ended June 30, 2023. The increase in noninterest income is
primarily due to a $1.5 million increase in other miscellaneous
noninterest income.
Noninterest Expense
Total noninterest expense decreased $296 thousand to $28.2
million in the second quarter of 2024 from $28.5 million in the
first quarter of 2024. The decrease was driven by a $873 thousand
decrease in shares tax, and a $309 thousand decrease in legal and
professional fees, partially offset by a $287 thousand increase in
FDIC assessments and $481 thousand increase in other miscellaneous
noninterest expense.
For the six months ended June 30, 2024, noninterest expense
totaled $56.7 million, a decrease of $6.9 million, or 19.7%,
compared to noninterest expense of $61.0 million for the six months
ended June 30, 2023. The decrease was primarily due to $7.9 million
of Brunswick acquisition costs in 2023, partially offset by a $506
thousand increase in salaries and benefits expense, also driven by
the Brunswick acquisition, and a $548 thousand increase in FDIC
charges due to increased assessment rates.
The efficiency ratio(1) was 63.7% in the second quarter of 2024,
compared to 68.8% in the first quarter of 2024, and 64.4% in the
second quarter of 2023. The improvement in the efficiency ratio
during the second quarter of 2024 compared to the first quarter of
2024 was the result of higher net interest income, and lower
noninterest expenses. The change from the second quarter of 2023
was driven by the reduction in noninterest expense from the
Brunswick acquisition in 2023. Mid Penn continues to evaluate
levels of noninterest expense for opportunities to reduce operating
costs throughout the organization.
Subsequent Events
Management considers subsequent events occurring after the
balance sheet date for matters which may require adjustment to, or
disclosure in, the consolidated financial statements. The review
period for subsequent events extends up to and including the filing
date of a public company’s consolidated financial statements when
filed with the Securities and Exchange Commission ("SEC").
Accordingly, the financial information in this announcement is
subject to change. The statements are valid only as of the date
hereof and Mid Penn disclaims any obligation to update this
information.
(1) Non-GAAP financial measure. Refer to the calculation on the
section titled “Reconciliation of Non-GAAP Measures” at the end of
this document.
SPECIAL CAUTIONARY NOTICE REGARDING
FORWARD-LOOKING STATEMENTS
This press release, and oral statements made regarding the
subjects of this release, contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements are not historical facts and include
expressions about management's confidence and strategies and
management's current views and expectations about new and existing
programs and products, relationships, opportunities, technology and
market conditions. These statements may be identified by such
forward-looking terminology as "continues," "expect," "look,"
"believe," "anticipate," "may," "will," "should," "projects,"
"strategy" or similar statements. Actual results may differ
materially from such forward-looking statements, and no reliance
should be placed on any forward-looking statement. Factors that may
cause results to differ materially from such forward-looking
statements include, but are not limited to, changes in interest
rates, spreads on earning assets and interest-bearing liabilities,
and interest rate sensitivity; prepayment speeds, loan
originations, credit losses and market values on loans, collateral
securing loans, and other assets; sources of liquidity; common
shares outstanding; common stock price volatility; fair value of
and number of stock-based compensation awards to be issued in
future periods; the impact of changes in market values on
securities held in Mid Penn’s portfolio; legislation affecting the
financial services industry as a whole, and Mid Penn and Mid Penn
Bank individually or collectively, including tax legislation;
results of the regulatory examination and supervision process and
oversight, including changes in monetary policy and capital
requirements; changes in accounting policies or procedures as may
be required by the Financial Accounting Standards Board or
regulatory agencies; increasing price and product/service
competition by competitors, including new entrants; rapid
technological developments and changes; the ability to continue to
introduce competitive new products and services on a timely,
cost-effective basis; the mix of products/services; containing
costs and expenses; governmental and public policy changes;
protection and validity of intellectual property rights; reliance
on large customers; technological, implementation and
cost/financial risks in large, multi-year contracts; the outcome of
future litigation and governmental proceedings, including
tax-related examinations and other matters; continued availability
of financing; the availability of financial resources in the
amounts, at the times and on the terms required to support Mid Penn
and Mid Penn Bank’s future businesses; material differences in the
actual financial results of merger, acquisition and investment
activities compared with Mid Penn’s initial expectations, including
the full realization of anticipated cost savings and revenue
enhancements; the possibility that the anticipated benefits of a
transaction are not realized when expected or at all, including as
a result of the impact of, or problems arising from, the
integration of the two companies or as a result of the strength of
the economy and competitive factors in legacy Mid Penn and target
markets; diversion of management’s attention from ongoing business
operations and opportunities; potential adverse reactions or
changes to business or employee relationships, including those
resulting from the announcement or completion of a transaction; the
ability to complete the integration of Mid Penn and its target
successfully; the dilution caused by Mid Penn’s issuance of
additional shares of its capital stock in connection with a
transaction; and other factors that may affect the future results
of Mid Penn.
For a more detailed description of these and other factors which
would affect our results, please see Mid Penn’s filings with the
SEC, including those risk factors identified in the "Risk Factors"
section and elsewhere in our Annual Report on Form 10-K for the
year ended December 31, 2023 and subsequent filings with the SEC.
The statements in this press release are made as of the date of
this press release, even if subsequently made available by Mid Penn
on its website or otherwise. Mid Penn does not undertake, and
specifically disclaims any obligation, to publicly release the
result of any revisions which may be made to forward-looking
statements to reflect events or circumstances after the date of
such statements or to reflect the occurrence of unanticipated
events, except as required by law.
SUMMARY FINANCIAL HIGHLIGHTS
(Unaudited):
(Dollars in thousands, except per share
data)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Ending Balances:
Investment securities
$
601,683
$
615,061
$
623,121
$
620,636
$
634,287
Loans, net of unearned interest
4,364,561
4,317,449
4,252,792
4,145,657
4,034,510
Total assets
5,396,467
5,330,379
5,290,792
5,214,718
5,087,568
Total deposits
4,501,729
4,379,105
4,346,212
4,380,380
4,285,450
Shareholders' equity
559,686
550,968
542,350
528,711
525,888
Average Balances:
Investment securities
608,173
615,687
606,946
619,071
630,750
Loans, net of unearned interest
4,353,360
4,293,828
4,201,092
4,053,514
3,808,717
Total assets
5,378,897
5,319,680
5,226,382
5,106,103
4,827,786
Total deposits
4,451,678
4,312,094
4,402,565
4,361,067
4,057,605
Shareholders' equity
553,675
546,001
537,219
529,067
504,535
Three Months Ended
Income Statement:
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Net interest income
$
38,766
$
36,456
$
37,000
$
37,480
$
36,444
Provision for credit losses
1,604
(937
)
(664
)
2,087
1,558
Noninterest income
5,329
5,837
5,117
5,346
5,220
Noninterest expense
28,224
28,520
28,389
29,229
35,128
Income before provision for income
taxes
14,267
14,710
14,392
11,510
4,978
Provision for income taxes
2,496
2,577
2,294
2,274
142
Net income available to shareholders
11,771
12,133
12,098
9,236
4,836
Net income excluding non-recurring income
and expenses (1)
11,284
10,673
12,098
9,514
11,112
Per Share:
Basic earnings per common share
$
0.71
$
0.73
$
0.73
$
0.56
$
0.29
Diluted earnings per common share
0.71
0.73
0.73
0.56
0.29
Cash dividends declared
0.20
0.20
0.20
0.20
0.20
Book value per common share
33.76
33.26
32.72
31.89
31.74
Tangible book value per common share
(1)
25.75
25.23
24.67
23.81
23.62
Asset Quality:
Net charge-offs (recoveries) to average
loans
0.002
%
0.004
%
0.004
%
0.001
%
0.018
%
Non-performing loans to total loans
0.23
0.24
0.33
0.32
0.39
Non-performing asset to total loans and
other real
0.24
0.36
0.34
0.35
0.40
Non-performing asset to total assets
0.19
0.29
0.27
0.28
0.32
ACL on loans to total loans
0.81
0.78
0.80
0.82
0.81
ACL on loans to nonperforming loans
352.92
322.69
240.48
252.67
205.65
Profitability:
Return on average assets
0.88
%
0.92
%
0.92
%
0.72
%
0.40
%
Return on average equity
8.55
8.94
8.93
6.93
3.84
Return on average tangible common equity
(1)
11.57
12.15
12.31
9.69
5.55
Net interest margin
3.12
2.98
3.02
3.16
3.31
Efficiency ratio (1)
63.65
68.80
66.42
66.34
64.44
Capital Ratios:
Tier 1 Capital (to Average Assets) (2)
8.4
%
8.3
%
8.3
%
8.4
%
9.6
%
Common Tier 1 Capital (to Risk Weighted
Assets) (2)
9.9
9.6
9.7
9.7
10.7
Tier 1 Capital (to Risk Weighted Assets)
(2)
9.9
9.6
9.7
9.7
10.7
Total Capital (to Risk Weighted Assets)
(2)
11.8
11.4
11.6
11.7
11.5
(1)
Non-GAAP financial measure. Refer to the
calculation on the section titled “Reconciliation of Non-GAAP
Measures” at the end of this document.
(2)
Regulatory capital ratios as of June 30,
2024 are preliminary and prior periods are actual.
CONSOLIDATED BALANCE SHEETS
(Unaudited):
(In thousands, except share data)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
ASSETS
Cash and due from banks
$
41,666
$
33,362
$
45,435
$
52,509
$
70,832
Interest-bearing balances with other
financial
25,585
31,801
34,668
12,739
13,332
Federal funds sold
43,193
2,922
16,660
52,851
9,711
Total cash and cash equivalents
110,444
68,085
96,763
118,099
93,875
Investment Securities:
Held to maturity, at amortized cost
393,320
396,998
399,128
401,561
404,831
Available for sale, at fair value
207,936
217,632
223,555
218,662
229,023
Equity securities available for sale, at
fair value
427
431
438
413
433
Loans held for sale
8,420
4,581
3,855
4,270
7,258
Loans, net of unearned interest
4,364,561
4,317,449
4,252,792
4,145,657
4,034,510
Less: Allowance for credit losses
(35,288
)
(33,524
)
(34,187
)
(34,004
)
(32,588
)
Net loans
4,329,273
4,283,925
4,218,605
4,111,653
4,001,922
Premises and equipment, net
34,344
36,068
36,909
38,102
38,483
Operating lease right of use asset
7,925
8,414
8,953
8,693
9,106
Finance lease right of use asset
2,638
2,683
2,727
2,773
2,817
Cash surrender value of life insurance
53,298
52,997
54,497
54,209
53,931
Restricted investment in bank stocks
13,930
17,446
16,768
13,554
11,646
Accrued interest receivable
27,381
26,975
25,820
24,230
19,626
Deferred income taxes
24,520
22,894
24,146
25,110
23,910
Goodwill
127,031
127,031
127,031
127,031
127,031
Core deposit and other intangibles,
net
5,626
6,051
6,479
6,970
7,453
Foreclosed assets held for sale
441
5,110
293
905
489
Other assets
49,513
53,058
44,825
58,483
55,734
Total Assets
$
5,396,467
$
5,330,379
$
5,290,792
$
5,214,718
$
5,087,568
LIABILITIES & SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand
$
770,732
$
807,861
$
801,312
$
803,550
$
822,822
Interest-bearing transaction accounts
2,194,948
2,082,846
2,086,450
2,217,885
2,186,734
Time
1,536,049
1,488,398
1,458,450
1,358,945
1,275,894
Total Deposits
4,501,729
4,379,105
4,346,212
4,380,380
4,285,450
Short-term borrowings
200,000
271,849
241,532
139,000
112,442
Long-term debt
23,827
23,941
59,003
58,991
58,981
Subordinated debt and trust preferred
securities
46,047
46,201
46,354
46,501
46,648
Operating lease liability
8,344
8,683
9,285
9,097
9,894
Accrued interest payable
18,139
16,330
14,257
14,657
11,115
Other liabilities
38,695
33,302
31,799
37,381
37,150
Total Liabilities
4,836,781
4,779,411
4,748,442
4,686,007
4,561,680
Shareholders' Equity:
Common stock, par value $1.00 per share;
40.0 million shares authorized
17,051
17,006
16,999
16,993
16,980
Additional paid-in capital
406,544
406,150
405,725
405,341
404,902
Retained earnings
163,256
154,801
145,982
137,199
131,271
Accumulated other comprehensive loss
(17,123
)
(16,947
)
(16,637
)
(21,362
)
(17,805
)
Treasury stock
(10,042
)
(10,042
)
(9,719
)
(9,460
)
(9,460
)
Total Shareholders’ Equity
559,686
550,968
542,350
528,711
525,888
Total Liabilities and Shareholders'
Equity
$
5,396,467
$
5,330,379
$
5,290,792
$
5,214,718
$
5,087,568
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited):
Three Months Ended
(Dollars in thousands, except per share
data)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
INTEREST INCOME
Loans, including fees
$
66,096
$
63,236
$
61,309
$
58,792
$
52,094
Investment securities:
Taxable
4,143
4,040
4,063
4,106
3,962
Tax-exempt
371
376
378
382
391
Other interest-bearing balances
347
403
139
86
83
Federal funds sold
282
136
228
51
49
Total Interest Income
71,239
68,191
66,117
63,417
56,579
INTEREST EXPENSE
Deposits
28,463
26,332
25,808
23,559
17,927
Short-term borrowings
3,324
4,446
2,506
1,584
1,507
Long-term and subordinated debt
686
957
803
794
701
Total Interest Expense
32,473
31,735
29,117
25,937
20,135
Net Interest Income
38,766
36,456
37,000
37,480
36,444
PROVISION FOR CREDIT LOSSES
1,604
(937
)
(664
)
2,087
1,558
Net Interest Income After Provision for
Credit Losses
37,162
37,393
37,664
35,393
34,886
NONINTEREST INCOME
Fiduciary and wealth management
1,129
1,132
1,323
1,296
1,204
ATM debit card interchange
973
945
979
986
998
Service charges on deposits
539
509
485
509
514
Mortgage banking
628
424
300
382
287
Mortgage hedging
—
—
109
67
128
Net gain on sales of SBA loans
74
107
358
85
128
Earnings from cash surrender value of life
insurance
301
284
288
278
292
Other
1,685
2,436
1,275
1,743
1,669
Total Noninterest Income
5,329
5,837
5,117
5,346
5,220
NONINTEREST EXPENSE
Salaries and employee benefits
15,533
15,462
15,215
15,259
15,027
Software licensing and utilization
2,208
2,120
1,826
2,085
2,070
Occupancy, net
1,861
1,982
1,952
1,761
1,750
Equipment
1,287
1,222
1,330
1,292
1,248
Shares tax
124
997
255
808
751
Legal and professional fees
689
998
653
890
602
ATM/card processing
510
534
442
641
532
Intangible amortization
425
428
491
484
461
FDIC Assessment
1,232
945
730
1,746
684
(Gain) loss on sale or write-down of
foreclosed assets, net
42
—
—
(18
)
(126
)
Merger and acquisition
—
—
—
352
4,992
Post-acquisition restructuring
—
—
—
—
2,952
Other
4,313
3,832
5,495
3,929
4,185
Total Noninterest Expense
28,224
28,520
28,389
29,229
35,128
INCOME BEFORE PROVISION FOR INCOME
TAXES
14,267
14,710
14,392
11,510
4,978
Provision for income taxes
2,496
2,577
2,294
2,274
142
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS
$
11,771
$
12,133
$
12,098
$
9,236
$
4,836
PER COMMON SHARE DATA:
Basic Earnings Per Common Share
$
0.71
$
0.73
$
0.73
$
0.56
$
0.29
Diluted Earnings Per Common Share
$
0.71
$
0.73
$
0.73
$
0.56
$
0.29
Cash Dividends Declared
$
0.20
$
0.20
$
0.20
$
0.20
$
0.20
CONSOLIDATED – AVERAGE BALANCE SHEET
AND NET INTEREST INCOME ANALYSIS (Unaudited):
Average Balances, Income and
Interest Rates on a Taxable Equivalent Basis
For the Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
(Dollars in thousands)
Average Balance
Interest
Yield/ Rate
Average Balance
Interest
Yield/ Rate
Average Balance
Interest
Yield/ Rate
ASSETS:
Interest Bearing Balances
$
35,618
$
347
3.92
%
$
39,999
$
403
4.05
%
$
7,777
$
83
4.28
%
Investment Securities:
Taxable
533,748
3,701
2.79
539,674
3,800
2.83
551,832
3,783
2.75
Tax-Exempt
74,425
371
2.00
76,013
376
1.99
78,918
391
1.99
Total Securities
608,173
4,072
2.69
615,687
4,176
2.73
630,750
4,174
2.65
Federal Funds Sold
19,432
282
5.84
10,373
136
5.27
6,035
49
3.26
Loans, Net of Unearned Interest
4,353,360
66,096
6.11
4,293,828
63,236
5.92
3,808,717
52,094
5.49
Restricted Investment in Bank Stocks
16,066
442
11.07
19,439
240
4.97
10,177
179
7.05
Total Earning Assets
5,032,649
71,239
5.69
4,979,326
68,191
5.51
4,463,456
56,579
5.08
Cash and Due from Banks
39,053
38,264
70,378
Other Assets
307,195
302,090
293,952
Total Assets
$
5,378,897
$
5,319,680
$
4,827,786
LIABILITIES & SHAREHOLDERS'
EQUITY:
Interest-bearing Demand
$
972,852
$
4,477
1.85
%
$
898,340
$
3,884
1.74
%
$
936,687
$
3,216
1.38
%
Money Market
908,807
6,632
2.94
876,242
5,968
2.74
929,774
5,104
2.20
Savings
281,560
52
0.07
287,765
72
0.10
319,728
64
0.08
Time
1,510,079
17,302
4.61
1,468,611
16,408
4.49
1,061,276
9,543
3.61
Total Interest-bearing Deposits
3,673,298
28,463
3.12
3,530,958
26,332
3.00
3,247,465
17,927
2.21
Short term borrowings
241,713
3,324
5.53
316,025
4,446
5.66
94,067
1,507
6.43
Long-term debt
23,870
262
4.41
40,571
533
5.28
54,347
194
1.43
Subordinated debt and trust preferred
securities
46,122
424
3.70
46,275
424
3.69
47,782
507
4.26
Total Interest-bearing Liabilities
3,985,003
32,473
3.28
3,933,829
31,735
3.24
3,443,661
20,135
2.35
Noninterest-bearing Demand
778,380
781,136
810,140
Other Liabilities
61,839
58,714
69,451
Shareholders' Equity
553,675
546,001
504,535
Total Liabilities & Shareholders'
Equity
$
5,378,897
$
5,319,680
$
4,827,787
Net Interest Income
$
38,766
$
36,456
$
36,444
Taxable Equivalent Adjustment (1)
253
260
202
Net Interest Income (taxable equivalent
basis)
$
39,019
$
36,716
$
36,646
Total Yield on Earning Assets
5.69
%
5.51
%
5.08
%
Rate on Supporting Liabilities
3.28
3.24
2.35
Average Interest Spread
2.42
2.26
2.74
Net Interest Margin
3.12
2.97
3.29
(1) Presented on a fully
taxable-equivalent basis using a 21% federal tax rate and statutory
interest expense disallowance.
ALLOWANCE FOR CREDIT LOSSES AND ASSET
QUALITY (Unaudited):
(Dollars in thousands)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Allowance for Credit Losses on
Loans:
Beginning balance
$
33,524
$
34,187
$
34,004
$
32,588
$
31,265
Purchase credit deteriorated loans
—
—
—
—
336
Loans Charged off
Commercial real estate
—
—
—
—
—
Commercial and industrial
(56
)
—
(19
)
—
(109
)
Construction
—
—
—
—
—
Residential mortgage
(2
)
(28
)
(9
)
—
—
Consumer
(4
)
(22
)
(17
)
(32
)
(65
)
Total loans charged off
(62
)
(50
)
(45
)
(32
)
(174
)
Recoveries of loans previously charged
off
Commercial real estate
4
—
—
—
—
Commercial and industrial
—
—
—
—
—
Construction
—
—
—
—
—
Residential mortgage
29
—
—
7
—
Consumer
11
6
7
14
4
Total recoveries
44
6
7
21
4
Balance before provision
33,506
34,143
33,966
32,577
31,431
Provision for credit losses - loans
1,782
(619
)
221
1,427
1,157
Balance, end of quarter
$
35,288
$
33,524
$
34,187
$
34,004
$
32,588
Nonperforming Assets
Total nonperforming loans
9,999
10,389
14,216
13,458
15,846
Foreclosed real estate
441
5,110
293
905
489
Total nonperforming assets
10,440
15,499
14,509
14,363
16,335
Accruing loans 90 days or more past
due
—
25
—
12
9
Total risk elements
$
10,440
$
15,524
$
14,509
$
14,375
$
16,344
RECONCILIATION OF NON-GAAP MEASURES
(Unaudited)
Explanatory note: This press
release contains financial information determined by methods other
than in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP"). Mid Penn’s management uses these non-GAAP
financial measures in their analysis of Mid Penn’s performance. For
tangible book value, the most directly comparable financial measure
calculated in accordance with GAAP is book value. We believe that
this measure is important to many investors in the marketplace who
are interested in changes from period to period in book value per
common share exclusive of changes in intangible assets. Goodwill
and other intangible assets have the effect of increasing total
book value while not increasing tangible book value. Income tax
effects of non-GAAP adjustments are calculated using the applicable
statutory tax rate for the jurisdictions in which the charges
(benefits) are incurred, while taking into consideration any
valuation allowances or non-deductible portions of the non-GAAP
adjustments. Adjusted earnings per common share excludes from
income available to common shareholders certain expenses related to
significant non-core activities, including merger-related expenses,
net of income taxes. For return on average tangible common equity,
the most directly comparable financial measure calculated in
accordance with GAAP is return on average equity. The efficiency
ratio is often used by management to measure its noninterest
expense as a percentage of its revenue. This non-GAAP disclosure
has limitations as an analytical tool, should not be viewed as a
substitute for financial measures determined in accordance with
GAAP, and should not be considered in isolation or as a substitute
for analysis of Mid Penn’s results and financial condition as
reported under GAAP, nor is it necessarily comparable to non-GAAP
performance measures that may be presented by other companies.
Management believes that this non-GAAP supplemental information
will be helpful in understanding Mid Penn’s ongoing operating
results. This supplemental presentation should not be construed as
an inference that Mid Penn’s future results will be unaffected by
similar adjustments to be determined in accordance with GAAP. The
reconciliation of the non-GAAP to comparable GAAP financial
measures can be found in the tables below.
Tangible Book Value Per
Share
(Dollars in thousands, except per share
data)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Shareholders' Equity
$
559,686
$
550,968
$
542,350
$
528,711
$
525,888
Less: Goodwill
127,031
127,031
127,031
127,031
127,031
Less: Core Deposit and Other
Intangibles
5,626
6,051
6,479
6,970
7,453
Tangible Equity
$
427,029
$
417,886
$
408,840
$
394,710
$
391,404
Common Shares Outstanding
16,580,595
16,565,637
16,573,707
16,580,347
16,567,578
Tangible Book Value per Share
$
25.75
$
25.23
$
24.67
$
23.81
$
23.62
Adjusted Earnings Per Common Share
Excluding Non-Recurring Income and Expenses
Three Months Ended
(Dollars in thousands, except per share
data)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Net Income Available to Common
Shareholders
$
11,771
$
12,133
$
12,098
$
9,236
$
4,836
Less: BOLI Death Benefit Income
487
1,460
—
—
—
Plus: Merger and Acquisition Expenses
—
—
—
352
7,944
Less: Tax Effect of Merger and Acquisition
Expenses
—
—
—
74
1,668
Net Income Excluding Non-Recurring Income
and Expenses
$
11,284
$
10,673
$
12,098
$
9,514
$
11,112
Weighted Average Shares Outstanding
16,576,283
16,567,902
16,574,199
16,571,825
16,235,106
Adjusted Earnings Per Common Share
Excluding Non-Recurring Income and Expenses
$
0.68
$
0.64
$
0.73
$
0.57
$
0.68
Return on Average Tangible Common
Equity
Three Months Ended
(Dollars in thousands)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Net income available to common
shareholders
$
11,771
$
12,133
$
12,098
$
9,236
$
4,836
Plus: Intangible amortization, net of
tax
336
338
388
382
364
$
12,107
$
12,471
$
12,486
$
9,618
$
5,200
Average shareholders' equity
$
553,675
$
546,001
$
537,219
$
529,067
$
504,535
Less: Average goodwill
127,031
127,031
127,031
127,031
120,631
Less: Average core deposit and other
intangibles
5,833
6,259
6,716
7,210
7,016
Average tangible shareholders' equity
$
420,811
$
412,711
$
403,472
$
394,826
$
376,888
Return on average tangible common
equity
11.57
%
12.15
%
12.31
%
9.69
%
5.55
%
Efficiency Ratio
Three Months Ended
(Dollars in thousands)
Jun. 30, 2024
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Noninterest expense
$
28,224
$
28,520
$
28,389
$
29,229
$
35,128
Less: Merger and acquisition expenses
—
—
—
352
7,944
Less: Intangible amortization
425
428
491
484
461
Less: Loss (Gain) on sale or write-down of
foreclosed assets, net
42
—
—
(18
)
(126
)
Efficiency ratio numerator
$
27,757
$
28,092
$
27,898
$
28,411
$
26,849
Net interest income
38,766
36,456
37,000
37,480
36,444
Noninterest income
5,329
5,837
5,117
5,346
5,220
Less: BOLI Death Benefit
487
1,460
—
—
—
Efficiency ratio denominator
$
43,608
$
40,833
$
42,117
$
42,826
$
41,664
Efficiency ratio
63.65
%
68.80
%
66.24
%
66.34
%
64.44
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240724341994/en/
Rory G. Ritrievi Chair, President & Chief Executive Officer
Justin T. Webb Chief Financial Officer 1-866-642-7736