Mid Penn Bancorp : Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

About this update from Mid Penn Bancorp

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, 2025. 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 2025 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: • Mid Penn's ability to efficiently integrate recent acquisitions into its business and operations, which may take longer than anticipated or be more costly than anticipated or result in unanticipated disruptions to existing operations; • 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; • 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 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; 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, 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; • our ability to successfully expand our franchise, including through acquisitions or establishing new offices at favorable prices; • potential goodwill impairment charges, or future impairment charges and fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames; • our ability to attract and retain qualified management and personnel; • results of regulatory examination and supervision processes; • the failure of assumptions underlying the establishment of reserves for loan 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, geopolitical instability, or other international conflicts; • supply chain disruption; and • the risk factors described in Item 1A of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2025 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. MID PENN BANCORP, INC. Overview Mid Penn is a financial holding company incorporated in August 1991 in the Commonwealth of Pennsylvania. Mid Penn 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 calculated on a fully taxable-equivalent basis ("FTE") as 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 June 30, Six Months Ended June 30, (Dollars in thousands) 2026 2025 2026 2025 Net Income $ 21,691 $ 4,762 $ 30,397 $ 18,504 Diluted EPS $ 0.85 $ 0.22 $ 1.22 $ 0.89 Dividends declared $ 0.22 $ 0.20 $ 0.44 $ 0.40 Return on average assets (2) 1.24 % 0.32 % 0.92 % 0.65 % Return on average equity (2) 9.75 % 2.85 % 7.06 % 5.60 % Net interest margin (1)(2) 4.06 % 3.44 % 3.94 % 3.41 % Nonperforming assets to total assets 0.52 % 0.44 % 0.52 % 0.44 % Net charge-offs/(recoveries) to average loans (annualized) 0.002 % 0.069 % 0.077 % 0.069 % (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 On February 27, 2026, Mid Penn completed the acquisition of 1st Colonial Bancorp, Inc. ("1st Colonial"), which added total assets of $842.5 million, comprised primarily of $597.5 million of loans. 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 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. This transaction included the acquisition of 12 branches, further expanding Mid Penn's presence in the Philadelphia region and surrounding counties in Pennsylvania and New Jersey. 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 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 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. ◦ 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. • 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. Critical Accounting Estimates The 2025 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. 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. 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, 2025. Results of Operations Net Interest Income Net interest income, Mid Penn's primary source of earnings, represents the difference between interest income received on loans, investments, and overnight funds, and interest expense paid on deposits and short- and long-term borrowings. Net interest income is affected by changes in interest rates and changes in average balances (volume) in the various interest-sensitive assets and liabilities. 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 and six months ended June 30, 2026 and 2025. 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 June 30, 2026 June 30, 2025 (Dollars in thousands) Average Balance Interest Yield/ Rate (2) Average Balance Interest Yield/ Rate (2) ASSETS: Interest Bearing Balances $ 19,067 $ 117 2.46 % $ 23,271 $ 142 2.45 % Investment Securities: Taxable 787,477 7,213 3.67 % 584,919 4,570 3.13 % Tax-exempt 55,840 284 2.04 % 67,186 344 2.05 % Total Investment Securities 843,317 7,497 3.57 % 652,105 4,914 3.02 % Federal funds sold 11,748 159 5.43 % 236,037 2,428 4.13 % Loans, net of unearned income 5,588,129 88,574 6.36 % 4,724,638 72,469 6.15 % Restricted investment in bank stocks 12,292 345 11.26 % 6,945 67 3.87 % Total Interest-earning Assets 6,474,553 96,692 5.99 % 5,642,996 80,020 5.69 % Cash and Due from Banks 55,360 50,376 Other Assets 466,108 342,673 Total Assets $ 6,996,021 $ 6,036,045 LIABILITIES & SHAREHOLDERS' EQUITY: Interest-bearing Demand $ 1,660,007 $ 6,712 1.62 % $ 1,123,130 $ 4,954 1.77 % Money market 1,243,822 7,838 2.53 % 1,179,295 8,350 2.84 % Savings 433,917 711 0.66 % 307,634 70 0.09 % Time 1,668,054 15,358 3.69 % 1,735,888 17,607 4.07 % Total Interest-bearing Deposits 5,005,800 30,619 2.45 % 4,345,947 30,981 2.86 % Short-term borrowings 79,875 764 3.84 % 7,418 86 4.65 % Long-term debt 2,886 29 4.03 % 23,417 252 4.32 % Subordinated debt - - - % 45,264 495 4.39 % Total Interest-bearing Liabilities 5,088,561 31,412 2.48 % 4,422,046 31,814 2.89 % Noninterest-bearing Demand 933,699 813,807 Other Liabilities 81,669 129,701 Shareholders' Equity 892,092 670,491 Total Liabilities & Shareholders' Equity $ 6,996,021 $ 6,036,045 Net Interest Income $ 65,280 $ 48,206 Taxable Equivalent Adjustment (1) 231 245 Net Interest Income (taxable-equivalent basis) $ 65,511 $ 48,451 Total Yield on Earning Assets 5.99 % 5.69 % Rate on Supporting Liabilities 2.48 % 2.89 % Average Interest Spread 3.51 % 2.80 % Net Interest Margin (1) 4.06 % 3.44 % (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 three months ended June 30, 2026 in comparison to the same period in 2025: Three Months Ended June 30, 2026 vs. June 30, 2025 Increase (decrease) (In thousands) Volume Rate Net INTEREST INCOME: Interest Bearing Balances $ (26) $ 1 $ (25) Investment Securities: Taxable 1,583 1,060 2,643 Tax-exempt (58) (2) (60) Total Investment Securities 1,525 1,058 2,583 Federal funds sold (2,307) 38 (2,269) Loans 13,245 2,860 16,105 Restricted investment in bank stocks 52 226 278 Total Interest Income 12,489 4,183 16,672 INTEREST EXPENSE: Interest-Bearing Deposits: Interest-bearing demand 2,368 (610) 1,758 Money market 457 (969) (512) Savings 29 612 641 Time (688) (1,561) (2,249) Total Interest-Bearing Deposits 2,166 (2,528) (362) Short-term borrowings 840 (162) 678 Long-term debt (221) (2) (223) Subordinated debt (495) - (495) Total Interest Expense 2,290 (2,692) (402) NET INTEREST INCOME $ 10,199 $ 6,875 $ 17,074 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. 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. 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. MID PENN BANCORP, INC. Average Balances, Income and Interest Rates on a Taxable-Equivalent Basis For the Six Months Ended June 30, 2026 2025 (Dollars in thousands) Average Balance Interest Yield/ Rate Average Balance Interest Yield/ Rate ASSETS: 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. 2026. 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 $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 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 June 30, (Dollars in thousands) 2026 2025 $ Variance % Variance Fiduciary and wealth management $ 3,891 $ 1,406 $ 2,485 176.7 % ATM debit card interchange 1,169 958 211 22.0 Service charges on deposits 632 652 (20) (3.1) Mortgage banking 1,119 676 443 65.5 Mortgage hedging 113 (7) 120 (1714.3) Net gain on sales of SBA loans 27 63 (36) (57.1) Earnings from cash surrender value of life insurance 1,041 491 550 112.0 Other 2,594 1,904 690 36.2 Total $ 10,586 $ 6,143 $ 4,443 72.3 % 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 June 30, (Dollars in thousands) 2026 2025 $ Variance % Variance Salaries and employee benefits $ 26,945 $ 20,753 $ 6,192 29.8 % Software licensing and utilization 4,155 3,272 883 27.0 Occupancy expense, net 2,891 2,365 526 22.2 Equipment expense 1,684 1,248 436 34.9 Shares tax 822 606 216 35.6 Legal and professional fees 2,157 993 1,164 117.2 ATM/card processing 689 621 68 11.0 Intangible amortization 1,819 744 1,075 144.5 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. 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. 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 Merger and acquisition expense 7,826 11,325 (3,499) (30.9) Other expenses 12,315 9,400 2,915 31.0 Total Noninterest Expense $ 99,725 $ 78,440 $ 21,285 27.1 % Income Taxes 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. The effective tax rate for the current period was higher than the federal statutory rate primarily due to the impact of state income taxes. This increase was driven by changes in the Corporation's state apportionment resulting from the acquisition of 1st Colonial, resulting in a higher proportion of income subject to higher state tax rates. 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. On 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 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 $7.1 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 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. MID PENN BANCORP, INC. 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 Total 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: U.S. Treasury and U.S. government agencies $ 7,363 1.61 % $ 5,349 2.89 % $ 4,122 3.10 % $ - - % $ 16,834 2.40 % Mortgage-backed U.S. government agencies - - - - 7,482 3.04 422,516 4.69 429,998 4.66 State and political subdivision obligations - - - - 3,111 2.51 679 2.23 3,790 2.45 Corporate debt securities 4,880 3.43 5,947 8.52 38,324 5.60 - - 49,151 5.72 $ 12,243 2.34 % $ 11,296 5.80 % $ 53,039 4.84 % $ 423,195 4.68 % $ 499,773 4.67 % Held-to-maturity securities, at amortized cost: U.S. Treasury and U.S. government agencies $ 18,500 1.80 % $ 130,682 1.86 % $ 74,368 2.21 % $ - - % $ 223,550 1.97 % Mortgage-backed U.S. government agencies 72 2.82 1,632 2.92 2,765 2.73 25,447 1.94 29,916 2.07 State and political subdivision obligations 50,461 3.24 33,626 2.26 14,361 2.42 8,502 2.74 106,950 2.78 Corporate debt securities - - 6,450 3.22 6,000 3.16 - - 12,450 3.19 $ 69,033 2.85 % $ 172,390 2.00 % $ 97,494 2.31 % $ 33,949 2.14 % $ 372,866 2.25 % Loans, net of unearned income 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. June 30, 2026 December 31, 2025 Change in Balance (Dollars in thousands) Balance % of Total Loans Balance % of Total Loans $ % Commercial real estate CRE Nonowner Occupied $ 1,599,855 28.5 % $ 1,364,040 28.1 % $ 235,815 17.3 % CRE Owner Occupied 830,915 14.8 718,864 14.7 112,051 15.6 Multifamily 446,216 7.9 419,267 8.6 26,949 6.4 Farmland 240,517 4.3 227,816 4.7 12,701 5.6 Total Commercial Real Estate 3,117,503 55.5 2,729,987 56.1 387,516 14.2 Commercial and industrial 728,431 13.0 720,031 14.8 8,400 1.2 Construction Residential Construction 87,934 1.5 85,299 1.8 2,635 3.1 Other Construction 330,502 5.9 310,390 6.3 20,112 6.5 Total Construction 418,436 7.4 395,689 8.1 22,747 5.7 Residential Mortgage 1-4 Family 1st Lien 574,948 10.2 417,421 8.6 157,527 37.7 1-4 Family Rental 470,501 8.4 410,965 8.5 59,536 14.5 HELOC and Junior Liens 297,241 5.3 178,116 3.7 119,125 66.9 Total Residential Mortgage 1,342,690 23.9 1,006,502 20.8 336,188 33.4 Consumer 10,109 0.2 10,629 0.2 (520) (4.9) $ 5,617,169 100.0 % $ 4,862,838 100.0 % $ 754,331 15.5 % The majority of the Bank's loan portfolio is to businesses and individuals located within the Bank's primary market area, which consists principally of central and southeastern Pennsylvania, along with select counties in 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 to identify credit portfolio weaknesses as early as possible, so any exposures that are discovered might be mitigated or potential losses reduced. Most of the Bank's loans are secured by real estate, and the value of this collateral is dependent on and subject to change based on real estate market conditions within its market area. 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) June 30, 2026 December 31, 2025 Commercial Real Estate Balance % of portfolio Weighted-Average LTV (2) Balance % of portfolio Weighted-Average LTV (2) Owner Occupied (1) $ 830,915 26.7 % N/A $ 718,864 26.3 % N/A Farmland (1) 240,517 7.7 N/A 227,816 8.3 N/A Multifamily 446,216 14.2 62.9 419,267 15.5 53.3 Non Owner Occupied Retail 453,763 14.6 50.1 429,095 15.7 50.4 Office 364,012 11.7 67.5 289,650 10.6 61.4 Industrial 195,595 6.3 49.8 177,822 6.5 48.0 Hospitality 222,408 7.1 49.3 158,667 5.8 47.1 Flex 55,853 1.8 46.6 46,432 1.7 47.2 Mobile Home Park 23,027 0.7 54.0 18,763 0.7 56.4 Health Care 24,398 0.8 60.5 11,870 0.4 52.8 Other Property Types 260,799 8.4 57.1 231,741 8.5 54.7 Total Commercial Real Estate $ 3,117,503 100.0 % 56.7 % $ 2,729,987 100.0 % 52.9 % (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 June 30, 2026 One Year and Less One to Five Years Five to Fifteen Years Over Fifteen Years Total Commercial real estate CRE Nonowner Occupied $ 174,069 $ 590,785 $ 519,310 $ 315,691 $ 1,599,855 CRE Owner Occupied 42,804 151,148 338,919 298,044 830,915 Multifamily 87,969 130,191 113,463 114,593 446,216 Farmland 1,242 11,991 71,058 156,226 240,517 Total Commercial real estate 306,084 884,115 1,042,750 884,554 3,117,503 Commercial and industrial 36,118 269,975 159,679 262,659 728,431 Construction Residential Construction 60,172 23,555 1,032 3,175 87,934 Other Construction 136,449 123,983 54,305 15,765 330,502 Total Construction 196,621 147,538 55,337 18,940 418,436 Residential mortgage 1-4 Family 1st Lien 8,995 27,097 104,509 434,347 574,948 1-4 Family Rental 50,488 54,934 159,157 205,922 470,501 HELOC and Junior Liens 3,571 15,780 48,521 229,369 297,241 Total Residential Mortgage 63,054 97,811 312,187 869,638 1,342,690 Consumer 3,523 1,393 2,184 3,009 10,109 Total loans held in portfolio $ 605,400 $ 1,400,832 $ 1,572,137 $ 2,038,800 $ 5,617,169 Fixed interest rates: MID PENN BANCORP, INC. Commercial real estate CRE Nonowner Occupied $ 128,132 $ 211,932 $ 60,942 $ 1,973 $ 402,979 CRE Owner Occupied 30,727 105,193 25,301 4,482 165,703 Multifamily 47,593 64,382 7,757 - 119,732 Farmland 364 8,457 3,639 - 12,460 Total Commercial real estate 206,816 389,964 97,639 6,455 700,874 Commercial and industrial 18,928 166,464 28,139 7,756 221,287 Construction Residential Construction 4,958 10,337 - 2,903 18,198 Other Construction 13,958 21,493 686 657 36,794 Total Construction 18,916 31,830 686 3,560 54,992 Residential mortgage 1-4 Family 1st Lien 7,764 17,134 80,624 360,489 466,011 1-4 Family Rental 18,282 40,872 14,175 12,922 86,251 HELOC and Junior Liens 862 9,568 33,763 2,897 47,090 Total Residential Mortgage 26,908 67,574 128,562 376,308 599,352 Consumer 1,823 1,393 2,039 794 6,049 Total fixed interest rates $ 273,391 $ 657,225 $ 257,065 $ 394,873 $ 1,582,554 Floating interest rates: Commercial real estate CRE Nonowner Occupied $ 45,937 $ 378,853 $ 458,368 $ 313,718 $ 1,196,876 CRE Owner Occupied 12,077 45,955 313,618 293,562 665,212 Multifamily 40,376 65,809 105,706 114,593 326,484 Farmland 878 3,534 67,419 156,226 228,057 Total Commercial real estate 99,268 494,151 945,111 878,099 2,416,629 Commercial and industrial 17,190 103,511 131,540 254,903 507,144 Construction Residential Construction 55,214 13,218 1,032 272 69,736 Other Construction 122,491 102,490 53,619 15,108 293,708 Total Construction 177,705 115,708 54,651 15,380 363,444 Residential mortgage 1-4 Family 1st Lien 1,231 9,963 23,885 73,858 108,937 1-4 Family Rental 32,206 14,062 144,982 193,000 384,250 HELOC and Junior Liens 2,709 6,212 14,758 226,472 250,151 Total Residential Mortgage 36,146 30,237 183,625 493,330 743,338 Consumer 1,700 - 145 2,215 4,060 Total floating interest rates 332,009 743,607 1,315,072 1,643,927 4,034,615 Total fixed and floating interest rates $ 605,400 $ 1,400,832 $ 1,572,137 $ 2,038,800 $ 5,617,169 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 judgment 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 June 30, Six Months Ended June 30, (Dollars in thousands) 2026 2025 2026 2025 Balance, beginning of period $ 41,105 $ 35,838 $ 36,091 $ 35,514 Purchased credit deteriorated loans - 343 977 343 Purchased seasoned loans - - 3,438 - Loans charged off during period (61) (909) (1,214) (924) Recoveries of loans previously charged off 39 98 143 116 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 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 June 30, 2026, December 31, 2025, and June 30, 2025. (Dollars in thousands) June 30, 2026 December 31, 2025 June 30, 2025 Nonperforming Assets: Total nonaccrual loans $ 28,420 $ 22,951 $ 18,216 Foreclosed real estate 8,390 7,806 9,816 Total nonperforming assets 36,810 30,757 28,032 Accruing loans 90 days or more past due 213 - - Total risk elements $ 37,023 $ 30,757 $ 28,032 Nonaccrual loans as a percentage of total loans outstanding 0.51 % 0.47 % 0.38 % Nonperforming assets as a percentage of total loans outstanding and foreclosed real estate 0.65 % 0.63 % 0.58 % Ratio of ACL-loans to nonperforming loans 146.52 % 157.25 % 206.49 % 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. Goodwill 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 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. Deposits 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 $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: June 30, 2026 December 31, 2025 Change (Dollars in thousands) Balance Rate Balance Rate $ % Noninterest-bearing demand deposits $ 892,547 0.00 % $ 816,429 0.00 % $ 76,118 9.32 % Interest-bearing demand deposits 1,522,053 1.61 1,179,007 1.77 343,046 29.10 Money market 1,230,277 2.51 1,176,166 2.79 54,111 4.60 Savings 398,950 0.51 306,431 0.08 92,519 30.19 Time 1,624,228 3.73 1,674,557 4.05 (50,329) (3.01) $ 5,668,055 2.08 % $ 5,152,590 2.36 % $ 515,465 10.00 % 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 Three months or less $ 200,920 Over three months to six months 129,040 Over six months to twelve months 69,609 Over twelve months 22,381 $ 421,950 Borrowings 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 $2.9 million at June 30, 2026, a decrease of $20.2 million from December 31, 2025. 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. MID PENN BANCORP, INC. The Consolidated Statements of Cash Flows provide additional information. 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 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: 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 % Tier I Risk-Based Capital (to Risk-Weighted Assets) 12.78 13.55 8.50 Common Equity Tier I (to Risk-Weighted Assets) 12.78 13.55 7.00 Tier I Leverage Capital (to Average Assets) 10.66 11.02 4.00 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. MID PENN BANCORP, INC. Shareholders' Equity Shareholders' equity 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 $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.

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