Mid Penn Bancorp surpasses earnings projections, announces major merger and dividend milestone

Mid Penn Bancorp, Inc., the parent company of Mid Penn Bank and MPB Financial Services, LLC, closed 2024 on a high note, reporting robust earnings for the fourth quarter. The bank achieved a net income of $13.2 million, or $0.72 per diluted share, exceeding analysts’ consensus estimate of $0.71 per share. This performance represents a 9.4% year-over-year increase from the $12.1 million net income recorded in Q4 2023.

For the full year ended December 31, 2024, Mid Penn reported a net income of $49.4 million, up an impressive 32.2% from $37.4 million in 2023. Earnings per share for the year grew to $2.90, compared to $2.29 in 2023.

Rory G. Ritrievi, Chair, President, and CEO of Mid Penn Bancorp, attributed the company’s success to disciplined financial strategies and the commitment of its employees. “Our focus on maintaining strong asset quality, improving our net interest margin, and effectively managing noninterest expenses has enabled us to deliver another solid year of growth,” Ritrievi noted.

What Were Mid Penn Bancorp’s Operational Highlights?

In Q4 2024, Mid Penn’s net interest margin (NIM) rose to 3.21%, a sequential increase from 3.13% in Q3 2024 and a year-over-year jump from 2.98%. This growth reflects the company’s proactive approach to managing borrowing costs and repricing assets in response to Federal Reserve rate cuts.

Additionally, Mid Penn reported a modest loan growth of $11.4 million during the quarter, aligning with its restrained growth strategy amid challenging market conditions. Total loans reached $4.4 billion as of December 31, 2024, a 4.5% increase from 2023.

Deposit trends presented mixed results, with a slight quarterly decline of $16.8 million attributed to reductions in noninterest-bearing and time deposit accounts. However, total deposits grew to $4.7 billion by year-end, reflecting a 7.91% year-over-year increase.

The bank’s shareholders’ equity rose by 20.8% year-over-year to $655 million, bolstered by retained earnings and the proceeds from an $80 million public offering of common stock in November 2024.

What Does the Merger with William Penn Bancorporation Mean for Mid Penn?

On October 31, 2024, Mid Penn Bancorp announced a merger agreement with William Penn Bancorporation in an all-stock transaction valued at approximately $107 million. The merger, anticipated to close in the first half of 2025, is expected to expand Mid Penn’s geographic reach and enhance its operational efficiencies.

Both companies’ boards of directors have unanimously approved the merger. However, completion remains subject to regulatory approvals and shareholder consent. This strategic move is designed to position Mid Penn as a stronger regional competitor in a consolidating banking landscape.

How Is Mid Penn Delivering Value to Shareholders?

Demonstrating its commitment to shareholder returns, Mid Penn declared its 57th consecutive quarterly dividend. A cash dividend of $0.20 per share will be paid on February 18, 2025, to shareholders of record as of February 7, 2025.

The consistency of dividend payments underscores Mid Penn’s financial stability and shareholder-focused approach, even amid an evolving economic environment.

What Is Driving Mid Penn’s Revenue and Asset Quality Growth?

For Q4 2024, Mid Penn’s net interest income reached $41.3 million, marking an increase from $40.2 million in Q3 2024 and $37 million in Q4 2023. The bank’s proactive asset repricing and effective deposit strategies contributed to this growth.

Noninterest income also grew, totaling $6.1 million, an 18.8% increase from Q3 2024. The rise was driven by higher insurance commissions, loan-level swap fees, and gains from bank-owned life insurance policies.

Mid Penn’s asset quality remains strong, with its provision for credit losses declining to $333,000 in Q4 2024, compared to $516,000 in Q3. Nonperforming assets stood at $22.7 million, up from $14.5 million in December 2023, reflecting the addition of a few commercial loans to nonaccrual status. Despite these increases, the bank maintained a low delinquency rate of 0.52% as of December 31, 2024.

What Are Mid Penn Bancorp’s Prospects for 2025?

Looking ahead, Mid Penn Bancorp is well-positioned for sustainable growth in 2025. The upcoming merger with William Penn Bancorporation is expected to unlock synergies and expand market share. Meanwhile, the company’s disciplined cost management and focus on enhancing profitability will likely remain central to its strategy.

With continued emphasis on asset quality, competitive deposit pricing, and shareholder returns, Mid Penn aims to build on its strong 2024 performance.