Mid Penn Bancorp : Consolidated Financial Statements - Form 8-K
April 24, 2024 at 04:36 pm EDT
Share
Exhibit 99.1
Mid Penn Bancorp, Inc.
2407 Park Drive
Harrisburg, PA 17110
1-866-642-7736
CONTACTS
Rory G. Ritrievi
Chair, President & Chief Executive Officer
Justin T. Webb
Chief Financial Officer
MID PENN BANCORP, INC. REPORTS FIRST QUARTER EARNINGS BEAT
AND DECLARES 54TH CONSECUTIVE QUARTERLY DIVIDEND
April 24, 2024 - Harrisburg, PA - 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 March 31, 2024, of $12.1 million, or $0.73 per diluted common share, versus analyst consensus of $0.61 per share.
Key Highlights of the First Quarter of 2024:
•Loan growth for the first quarter of 2024 was $64.7 million, or 6.1% (annualized). Total loans increased $706.1 million compared to the first quarter of 2023. Excluding the Brunswick loans of $324.5 million acquired in 2023, organic loan growth for the quarter ended March 31, 2024, from the quarter ended March 31, 2023 was $381.6 million or 10.6%.
•Deposits increased $32.9 million, or 3.0% (annualized), for the first quarter of 2024. Organic deposits increased $219.6 million, or 5.7% (excluding Brunswick acquisition deposits in 2023 of $281.4 million) for the quarter ended March 31, 2024, compared to the quarter ended March 31, 2023.
•Net income available to common shareholders increased 0.3% to $12.1 million, or $0.73 per diluted common share, for the first quarter of 2024, compared to net income of $12.1 million, or $0.73 per diluted common share for the fourth quarter of 2023. Net income available to common shareholders increased 8.07% to $12.1 million, or $0.73 per diluted common share, for the first quarter of 2024, compared to net income of $11.2 million, or $0.71 per diluted common share, for the first quarter of 2023.
•Tangible book value per common share increased to $25.23 for the quarter ended March 31, 2024, compared to $24.67 and $24.52 for the periods ended December 31, 2023 and March 31, 2023, respectively.
•Return on average assets was 0.92% and return on average equity was 8.94% for the quarter ended March 31, 2024, compared to return on average assets of 0.92% and return on average equity of 8.93% in the fourth quarter of 2023.
•The Board declared a cash dividend of $0.20 per share, payable May 27, 2024, to shareholders of record as of May 10, 2024.
1
"With the continuation of the inverted yield curve, persistent escalation in funding costs and additional regional bank asset quality issues, we entered the first quarter expecting a daily fight simply to meet analyst expectations. The team at Mid Penn once again delivered with $0.73 in quarterly EPS, which is almost 20% over consensus estimates. We feel good about those results," Chair, President and CEO Rory G. Ritrievi said. "In my 4Q23 message, I signaled that we would be cutting operating costs while also significantly slowing down balance sheet growth until the operating environment improved. In reviewing these results, you will see that we accomplished that while also continuing a solid trend in asset quality."
Ritrievi continued, "At the time I am writing this, however, we are already almost a full month into another challenging quarter. While inflation persists, interest rate reductions - which could help normalize the interest rate curve - have been delayed. Now over 500 days inverted, the shape of the interest rate curve is a real concern for positive economic activity. It certainly has an impact on a community bank like Mid Penn, in that our net interest margin remains under considerable pressure. Adding to that concern are significant geopolitical tensions with conflicts in Eastern Europe, the Middle East and beyond, which have a negative economic impact here and abroad."
"Throughout the current quarter and the rest of the year, Mid Penn will continue to execute the specific strategic plan I outlined three months ago. We will continue our focus on restrained growth while also restraining operating expenses," Ritrievi added. "Our laser focus on asset quality preservation never changes. It is a core tenet of how we do business. Even in the face of significant external trade winds, we are cautiously optimistic that we will continue to build on our first quarter success and ultimately deliver a 2024 performance in line with analysts' expectations."
For the first quarter of 2024, the Board is pleased to announce a quarterly cash dividend of $0.20 per share of common stock, which was declared at its meeting on April 24, 2024, payable on May 27, 2024, to shareholders of record as of May 10, 2024.
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Net Interest Income
For the three months ended March 31, 2024, net interest income was $36.5 million compared to net interest income of $37.0 million for the three months ended December 31, 2023, and $36.0 million for the three months ended March 31, 2023. The tax-equivalent net interest margin for the three months ended March 31, 2024 was 2.97% compared to 3.02% for the fourth quarter of 2023, and 3.49% for the first quarter of 2023, representing a 1 basis point ("bp") decrease compared to the prior quarter, and a 53 bp decrease compared to the same period in 2023, primarily driven by higher interest rates resulting from persistent inflation.
The yield on interest-earning assets increased to 5.51% for the quarter ended March 31, 2024, from 5.35% for the quarter ended December 31, 2023, and 4.86% for the quarter ended March 31, 2023. These increases were due to assets continuing to reprice at higher rates during the first quarter of 2024. Increased yields on interest-earning assets were more than offset by increases in funding costs for the first quarter of 2024, with the overall cost of interest-bearing liabilities increasing to 3.24% during the first quarter of 2024, compared to 3.02% for the three months ended December 31, 2023, and 1.81% for the three months ended March 31, 2023.
Average Balances
Average loans increased $92.7 million to $4.3 billion for the quarter ended March 31, 2024, compared to $4.2 billion for the quarter ended December 31, 2023, and $3.6 billion for the quarter ended March 31, 2023. Average deposits were $4.3 billion for the first quarter of 2024, reflecting a decrease of $90.5 million, or 2.1%, compared to total average deposits of $4.4 billion in the fourth quarter of 2023, and an increase of $529.1 million, or 14.0%, compared to total average deposits of $3.8 billion for the first 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 2.46% for the first quarter of 2024, representing a 13 bp increase and a 117 bp increase from the fourth quarter of 2023 and the first 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.
Deposits were $4.4 billion as of March 31, 2024, compared to $4.3 billion and $3.9 billion at December 31, 2023, and March 31, 2023, respectively. The increase during the first quarter of 2024 was primarily related to a $29.9 million increase in time deposits. Time deposits represented 33.6% of total deposits at December 31, 2023, and increased to 34.0% at March 31, 2024. The mix of non-interest-bearing deposits increased $6.5 million from the fourth quarter of 2023, representing approximately 18.4% of total deposits at March 31, 2024, compared to 18.4% at December 31, 2023, 18.3% at September 30, 2023, and 19.2% at June 30, 2023. The average duration of the non-hedged time deposit portfolio was 12 months at March 31, 2024.
Asset Quality
The total provision for credit losses, including provision for credit losses on off-balance sheet credit exposures, was $(937) thousand for the three months ended March 31, 2024, a decrease of $273 thousand and $1.7 million compared to the provision for credit losses of $(664) thousand and $719 thousand for the three months ended December 31, 2023 and the three months ended March 31, 2023, respectively.
The provision for credit losses on loans was $(619) thousand for the three months ended March 31, 2024, a decrease of $1.1 million compared to the provision for credit losses of $490 thousand for the three months ended March 31, 2023. The decrease in provision for the three months ended March 31, 2024, is primarily due to a decrease in loss factors across all portfolios. The provision for credit losses on off-balance sheet credit exposures was $(318) thousand for the three months ended March 31, 2024. Net charge-offs for the three months ended March 31, 2024, were $44 thousand or 0.001% of total loans.
Total nonperforming assets were $15.5 million at March 31, 2024, compared to nonperforming assets of $14.5 million and $14.2 million at December 31, 2023, and March 31, 2023, respectively. The increase during the first quarter of 2024 primarily related to loans totaling $1.1 million attributable to one relationship placed on non-accrual. Delinquency as a percentage of total loans was 0.38% at March 31, 2024.
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Capital
Shareholders' equity increased $8.6 million, or 1.59%, from $542.4 million as of December 31, 2023 to $551.0 million as of March 31, 2024. Retained earnings increased $8.8 million, or 6.04%, from $146.0 million as of December 31, 2023, to $154.8 million as of March 31, 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 March 31, 2024. Additionally, Mid Penn declared $3.3 million in dividends during the first 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 three months ended March 31, 2024, Mid Penn has repurchased 15,500 shares of common stock at an average price of $20.81. As of March 31, 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 March 31, 2024.
Noninterest Income
For the three months ended March 31, 2024, noninterest income totaled $5.8 million, an increase of $720 thousand, or 14.1%, compared to noninterest income of $5.1 million for the fourth quarter of 2023. The increase is primarily due to a $1.2 million increase in other miscellaneous noninterest income, offset by decreases in gains on sales of SBA loans, fiduciary and wealth management, and mortgage hedging income.
For the three months ended March 31, 2024, noninterest income totaled $5.8 million, an increase of $1.5 million, or 34.96%, compared to noninterest income of $4.3 million for the three months ended March 31, 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 increased $131 thousand to $28.5 million in the first quarter of 2024 from $28.4 million in the prior quarter, driven by a $742 thousand increase in shares tax on stock repurchases, which is due to credits that were received in the fourth quarter of 2023, lowering the expense. Additionally, there was a $345 thousand increase in legal and professional fees, and a $247 thousand increase in salaries and benefits expense, which typically run higher in the first quarter due to payroll taxes and other payroll benefits resetting, offset by expected decreases in other noninterest expenses, due to corporate efforts to reduce operating costs.
For the three months ended March 31, 2024, noninterest expense totaled $28.5 million, an increase of $2.7 million, or 10.4%, compared to noninterest expense of $25.8 million for the three months ended March 31, 2023. The increase was primarily the result of a $1.6 million increase in salaries and benefits expense, driven by the Brunswick acquisition, and a $605 thousand increase in FDIC charges due to increased assessment rates.
The efficiency ratio(1) was 68.8% in the first quarter of 2024, compared to 66.2% in the fourth quarter of 2023, and 62.6% in the first quarter of 2023. The change in the efficiency ratio during the first quarter of 2024 compared to the fourth quarter of 2023 was the result of higher noninterest income and slightly higher noninterest expenses, partially offset by lower net interest income, driven by the current interest rate environment. The change compared to the first quarter of 2023 was driven by growth in noninterest expense outpacing growth in net interest income, again due to the current rate environment. 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.
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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.
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SUMMARY FINANCIAL HIGHLIGHTS (Unaudited):
(Dollars in thousands, except per share data)
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Ending Balances:
Investment securities
$
615,061
$
623,121
$
620,636
$
634,287
$
633,831
Loans, net of unearned interest
4,317,449
4,252,792
4,145,657
4,034,510
3,611,347
Total assets
5,330,379
5,290,792
5,214,718
5,087,568
4,583,465
Total deposits
4,379,105
4,346,212
4,380,380
4,285,450
3,878,081
Shareholders' equity
550,968
542,350
528,711
525,888
510,793
Average Balances:
Investment securities
615,687
606,946
619,071
630,750
636,151
Loans, net of unearned interest
4,293,828
4,201,092
4,053,514
3,808,717
3,555,375
Total assets
5,319,680
5,226,382
5,106,103
4,827,786
4,520,869
Total deposits
4,312,094
4,402,565
4,361,067
4,057,605
3,782,990
Shareholders' equity
546,001
537,219
529,067
504,535
510,857
Three Months Ended
Income Statement:
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Net interest income
$
36,456
$
37,000
$
37,480
$
36,444
$
36,049
Provision for credit losses
(937)
(664)
2,087
1,558
719
Noninterest income
5,837
5,117
5,346
5,220
4,325
Noninterest expense
28,520
28,389
29,229
35,128
25,841
Income before provision for income taxes
14,710
14,392
11,510
4,978
13,814
Provision for income taxes
2,577
2,294
2,274
142
2,587
Net income available to shareholders
12,133
12,098
9,236
4,836
11,227
Net income excluding non-recurring income and expenses (1)
10,673
12,098
9,514
11,112
11,404
Per Share:
Basic earnings per common share
$
0.73
$
0.73
$
0.56
$
0.29
$
0.71
Diluted earnings per common share
0.73
0.73
0.56
0.29
0.70
Cash dividends declared
0.20
0.20
0.20
0.20
0.20
Book value per common share
33.26
32.72
31.89
31.74
32.15
Tangible book value per common share (1)
25.23
24.67
23.81
23.62
24.52
Asset Quality:
Net charge-offs (recoveries) to average loans (annualized)
0.004
%
0.004
%
0.001
%
0.018
%
0.013
%
Non-performing loans to total loans
0.24
0.33
0.32
0.39
0.38
Non-performing asset to total loans and other real estate
0.36
0.34
0.35
0.40
0.39
Non-performing asset to total assets
0.29
0.27
0.28
0.32
0.31
ACL on loans to total loans
0.78
0.80
0.82
0.81
0.87
ACL on loans to nonperforming loans
322.66
240.48
252.67
205.65
225.71
Profitability:
Return on average assets
0.92
%
0.92
%
0.72
%
0.40
%
1.01
%
Return on average equity
8.94
8.93
6.93
3.84
8.91
Return on average tangible common equity (1)
12.15
12.31
9.69
5.55
12.01
Net interest margin
2.97
3.02
3.16
3.29
3.49
Efficiency ratio (1)
68.80
66.24
66.34
64.44
62.60
Capital Ratios:
Tier 1 Capital (to Average Assets) (2)
8.3
%
8.3
%
8.4
%
9.6
%
9.2
%
Common Tier 1 Capital (to Risk Weighted Assets) (2)
9.6
9.7
9.7
10.7
10.8
Tier 1 Capital (to Risk Weighted Assets) (2)
9.6
9.7
9.7
10.7
10.8
Total Capital (to Risk Weighted Assets) (2)
11.4
11.6
11.7
11.5
13.1
(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 March 31, 2024 are preliminary and prior periods are actual.
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CONSOLIDATED BALANCE SHEETS (Unaudited):
(In thousands, except share data)
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
ASSETS
Cash and due from banks
$
33,362
$
45,435
$
52,509
$
70,832
$
51,158
Interest-bearing balances with other financial institutions
31,801
34,668
12,739
13,332
4,996
Federal funds sold
2,922
16,660
52,851
9,711
6,017
Total cash and cash equivalents
68,085
96,763
118,099
93,875
62,171
Investment Securities:
Held to maturity, at amortized cost
396,998
399,128
401,561
404,831
396,784
Available for sale, at fair value
217,632
223,555
218,662
229,023
236,609
Equity securities available for sale, at fair value
431
438
413
433
438
Loans held for sale
4,581
3,855
4,270
7,258
2,677
Loans, net of unearned interest
4,317,449
4,252,792
4,145,657
4,034,510
3,611,347
Less: Allowance for credit losses
(33,524)
(34,187)
(34,004)
(32,588)
(31,265)
Net loans
4,283,925
4,218,605
4,111,653
4,001,922
3,580,082
Premises and equipment, net
36,068
36,909
38,102
38,483
34,191
Operating lease right of use asset
8,414
8,953
8,693
9,106
8,414
Finance lease right of use asset
2,683
2,727
2,773
2,817
2,862
Cash surrender value of life insurance
52,997
54,497
54,209
53,931
50,928
Restricted investment in bank stocks
17,446
16,768
13,554
11,646
8,041
Accrued interest receivable
26,975
25,820
24,230
19,626
19,205
Deferred income taxes
22,894
24,146
25,110
23,910
15,548
Goodwill
127,031
127,031
127,031
127,031
114,231
Core deposit and other intangibles, net
6,051
6,479
6,970
7,453
6,916
Foreclosed assets held for sale
5,110
293
905
489
248
Other assets
53,058
44,825
58,483
55,734
44,120
Total Assets
$
5,330,379
$
5,290,792
$
5,214,718
$
5,087,568
$
4,583,465
LIABILITIES & SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand
$
807,861
$
801,312
$
803,550
$
822,822
$
797,038
Interest-bearing transaction accounts
2,082,846
2,086,450
2,217,885
2,186,734
2,197,216
Time
1,488,398
1,458,450
1,358,945
1,275,894
883,827
Total Deposits
4,379,105
4,346,212
4,380,380
4,285,450
3,878,081
Short-term borrowings
271,849
241,532
139,000
112,442
88,000
Long-term debt
23,941
59,003
58,991
58,981
4,316
Subordinated debt and trust preferred securities
46,201
46,354
46,501
46,648
56,794
Operating lease liability
8,683
9,285
9,097
9,894
9,270
Accrued interest payable
16,330
14,257
14,657
11,115
5,809
Other liabilities
33,302
31,799
37,381
37,150
30,402
Total Liabilities
4,779,411
4,748,442
4,686,007
4,561,680
4,072,672
Shareholders' Equity:
Common stock, par value $1.00 per share; 40.0 million shares authorized
17,006
16,999
16,993
16,980
16,098
Additional paid-in capital
406,150
405,725
405,341
404,902
387,332
Retained earnings
154,801
145,982
137,199
131,271
129,617
Accumulated other comprehensive loss
(16,947)
(16,637)
(21,362)
(17,805)
(17,374)
Treasury stock
(10,042)
(9,719)
(9,460)
(9,460)
(4,880)
Total Shareholders' Equity
550,968
542,350
528,711
525,888
510,793
Total Liabilities and Shareholders' Equity
$
5,330,379
$
5,290,792
$
5,214,718
$
5,087,568
$
4,583,465
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CONSOLIDATED STATEMENTS OF INCOME (Unaudited):
Three Months Ended
(Dollars in thousands, except per share data)
Mar. 31, 2024
Dec. 31, 2023
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
INTEREST INCOME
Loans, including fees
$
63,236
$
61,309
$
58,792
$
52,094
$
45,865
Investment securities:
Taxable
4,040
4,063
4,106
3,962
3,874
Tax-exempt
376
378
382
391
389
Other interest-bearing balances
403
139
86
83
53
Federal funds sold
136
228
51
49
45
Total Interest Income
68,191
66,117
63,417
56,579
50,226
INTEREST EXPENSE
Deposits
26,332
25,808
23,559
17,927
12,001
Short-term borrowings
4,446
2,506
1,584
1,507
1,490
Long-term and subordinated debt
957
803
794
701
686
Total Interest Expense
31,735
29,117
25,937
20,135
14,177
Net Interest Income
36,456
37,000
37,480
36,444
36,049
PROVISION FOR CREDIT LOSSES
(937)
(664)
2,087
1,558
719
Net Interest Income After Provision for Credit Losses
37,393
37,664
35,393
34,886
35,330
NONINTEREST INCOME
Fiduciary and wealth management
1,132
1,323
1,296
1,204
1,236
ATM debit card interchange
945
979
986
998
1,056
Service charges on deposits
509
485
509
514
435
Mortgage banking
424
300
382
287
384
Mortgage hedging
-
109
67
128
20
Net gain on sales of SBA loans
107
358
85
128
-
Earnings from cash surrender value of life insurance
284
288
278
292
254
Other
2,436
1,275
1,743
1,669
940
Total Noninterest Income
5,837
5,117
5,346
5,220
4,325
NONINTEREST EXPENSE
Salaries and employee benefits
15,462
15,215
15,259
15,027
13,844
Software licensing and utilization
2,120
1,826
2,085
2,070
1,946
Occupancy, net
1,982
1,952
1,761
1,750
1,886
Equipment
1,222
1,330
1,292
1,248
1,251
Shares tax
997
255
808
751
899
Legal and professional fees
998
653
890
602
800
ATM/card processing
534
442
641
532
493
Intangible amortization
428
491
484
461
344
FDIC Assessment
945
730
1,746
684
340
(Gain) loss on sale or write-down of foreclosed assets, net
-
-
(18)
(126)
-
Merger and acquisition
-
-
352
4,992
224
Post-acquisition restructuring
-
-
-
2,952
-
Other
3,832
5,495
3,929
4,185
3,814
Total Noninterest Expense
28,520
28,389
29,229
35,128
25,841
INCOME BEFORE PROVISION FOR INCOME TAXES
14,710
14,392
11,510
4,978
13,814
Provision for income taxes
2,577
2,294
2,274
142
2,587
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
$
12,133
$
12,098
$
9,236
$
4,836
$
11,227
PER COMMON SHARE DATA:
Basic Earnings Per Common Share
$
0.73
$
0.73
$
0.56
$
0.29
$
0.71
Diluted Earnings Per Common Share
$
0.73
$
0.73
$
0.56
$
0.29
$
0.70
Cash Dividends Declared
$
0.20
$
0.20
$
0.20
$
0.20
$
0.20
8
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
March 31, 2024
December 31, 2023
March 31, 2023
(Dollars in thousands)
Average Balance
Interest
Yield/
Rate
Average Balance
Interest
Yield/
Rate
Average Balance
Interest
Yield/
Rate
ASSETS:
Interest Bearing Balances
$
39,999
$
403
4.05
%
$
30,715
$
139
1.80
%
$
5,761
$
53
3.73
%
Investment Securities:
Taxable
539,674
3,800
2.83
530,099
3,199
2.39
556,901
3,764
2.74
Tax-Exempt
76,013
376
1.99
76,847
378
1.95
79,250
493
2.52
Total Securities
615,687
4,176
2.73
606,946
3,577
2.34
636,151
4,257
2.71
Federal Funds Sold
10,373
136
5.27
12,224
228
7.40
3,775
45
4.83
Loans, Net of Unearned Interest
4,293,828
63,236
5.92
4,201,092
61,309
5.79
3,555,375
45,961
5.24
Restricted Investment in Bank Stocks
19,439
239
4.94
13,754
315
9.09
9,542
110
4.68
Total Earning Assets
4,979,326
68,190
5.51
4,864,731
65,568
5.35
4,210,604
50,426
4.86
Cash and Due from Banks
38,264
38,370
51,444
Other Assets
302,090
323,281
258,821
Total Assets
$
5,319,680
$
5,226,382
$
4,520,869
LIABILITIES & SHAREHOLDERS' EQUITY:
Interest-bearing Demand
$
898,340
$
3,884
1.74
%
$
938,246
$
4,087
1.73
%
$
968,951
$
2,691
1.13
%
Money Market
876,242
5,968
2.74
925,902
6,266
2.68
940,286
4,084
1.76
Savings
287,765
72
0.10
295,757
53
0.07
330,773
54
0.07
Time
1,468,611
16,408
4.49
1,405,927
15,403
4.35
749,598
5,172
2.80
Total Interest-bearing Deposits
3,530,958
26,332
3.00
3,565,832
25,809
2.87
2,989,608
12,001
1.63
Short term borrowings
316,025
4,446
5.66
149,218
2,506
6.66
121,898
1,490
4.96
Long-term debt
40,571
533
5.28
58,987
373
2.51
4,350
44
4.10
Subordinated debt and trust preferred securities
46,275
424
3.69
46,425
429
3.67
56,875
642
4.58
Total Interest-bearing Liabilities
3,933,829
31,735
3.24
3,820,462
29,117
3.02
3,172,731
14,177
1.81
Noninterest-bearing Demand
781,136
836,733
793,382
Other Liabilities
58,714
31,968
43,899
Shareholders' Equity
546,001
537,219
510,857
Total Liabilities & Shareholders' Equity
$
5,319,680
$
5,226,382
$
4,520,869
Net Interest Income
$
36,455
$
36,451
$
36,049
Taxable Equivalent Adjustment (1)
260
33
200
Net Interest Income (taxable equivalent basis)
$
36,715
$
36,484
$
36,249
Total Yield on Earning Assets
5.51
%
5.35
%
4.86
%
Rate on Supporting Liabilities
3.24
3.02
1.81
Average Interest Spread
2.26
2.32
3.05
Net Interest Margin
2.97
2.97
3.49
(1)Presented on a fully taxable-equivalent basis using a 21% federal tax rate and statutory interest expense disallowance.
9
ALLOWANCE FOR CREDIT LOSSES AND ASSET QUALITY (Unaudited):
(Dollars in thousands)
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Allowance for Credit Losses on Loans:
Beginning balance
$
34,187
$
34,004
$
32,588
$
31,265
$
18,957
Impact of adopting CECL
-
-
-
-
11,931
Purchase credit deteriorated loans
-
-
-
336
-
Loans Charged off
Commercial real estate
-
-
-
-
(16)
Commercial and industrial
-
(19)
-
(109)
(111)
Construction
-
-
-
-
-
Residential mortgage
(28)
(9)
-
-
(4)
Consumer
(22)
(17)
(32)
(65)
(19)
Total loans charged off
(50)
(45)
(32)
(174)
(150)
Recoveries of loans previously charged off
Commercial real estate
-
-
-
-
-
Commercial and industrial
-
-
-
-
-
Construction
-
-
-
-
-
Residential mortgage
-
-
7
-
30
Consumer
6
7
14
4
7
Total recoveries
6
7
21
4
37
Balance before provision
34,143
33,966
32,577
31,431
30,775
Provision for credit losses - loans
(619)
221
1,427
1,157
490
Balance, end of quarter
$
33,524
$
34,187
$
34,004
$
32,588
$
31,265
Nonperforming Assets
Total nonperforming loans
10,390
14,216
13,458
15,846
13,909
Foreclosed real estate
5,110
293
905
489
248
Total nonperforming assets
15,500
14,509
14,363
16,335
14,157
Accruing loans 90 days or more past due
25
-
12
9
7
Total risk elements
$
15,525
$
14,509
$
14,375
$
16,344
$
14,164
10
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)
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Shareholders' Equity
$
550,968
$
542,350
$
528,711
$
525,888
$
510,793
Less: Goodwill
127,031
127,031
127,031
127,031
114,231
Less: Core Deposit and Other Intangibles
6,051
6,479
6,970
7,453
6,916
Tangible Equity
$
417,886
$
408,840
$
394,710
$
391,404
$
389,646
Common Shares Outstanding
16,565,637
16,573,707
16,580,347
16,567,578
15,890,011
Tangible Book Value per Share
$
25.23
$
24.67
$
23.81
$
23.62
$
24.52
Adjusted Earnings Per Common Share Excluding Non-Recurring Income and Expenses
Three Months Ended
(Dollars in thousands, except per share data)
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Net Income Available to Common Shareholders
$
12,133
$
12,098
$
9,236
$
4,836
$
11,227
Less: BOLI Death Benefit Income
1,460
-
-
-
-
Plus: Merger and Acquisition Expenses
-
-
352
7,944
224
Less: Tax Effect of Merger and Acquisition Expenses
-
-
74
1,668
47
Net Income Excluding Non-Recurring Income and Expenses
$
10,673
$
12,098
$
9,514
$
11,112
$
11,404
Weighted Average Shares Outstanding
16,567,902
16,574,199
16,571,825
16,235,106
15,886,186
Adjusted Earnings Per Common Share Excluding Non-Recurring Income and Expenses
$
0.64
$
0.73
$
0.57
$
0.68
$
0.72
11
Return on Average Tangible Common Equity
Three Months Ended
(Dollars in thousands)
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Net income available to common shareholders
$
12,133
$
12,098
$
9,236
$
4,836
$
11,227
Plus: Intangible amortization, net of tax
338
388
382
364
272
$
12,471
$
12,486
$
9,618
$
5,200
$
11,499
Average shareholders' equity
$
546,001
$
537,219
$
529,067
$
504,535
$
510,857
Less: Average goodwill
127,031
127,031
127,031
120,631
114,231
Less: Average core deposit and other intangibles
6,259
6,716
7,210
7,016
7,129
Average tangible shareholders' equity
$
412,711
$
403,472
$
394,826
$
376,888
$
389,497
Return on average tangible common equity
12.15
%
12.31
%
9.69
%
5.55
%
12.01
%
Efficiency Ratio
Three Months Ended
(Dollars in thousands)
Mar. 31,
2024
Dec. 31,
2023
Sep. 30,
2023
Jun. 30,
2023
Mar. 31,
2023
Noninterest expense
$
28,520
$
28,389
$
29,229
$
35,128
$
25,841
Less: Merger and acquisition expenses
-
-
352
7,944
224
Less: Intangible amortization
428
491
484
461
344
Less: (Gain) loss on sale or write-down of foreclosed assets, net
-
-
(18)
(126)
-
Efficiency ratio numerator
$
28,092
$
27,898
$
28,411
$
26,849
$
25,273
Net interest income
36,456
37,000
37,480
36,444
36,049
Noninterest income
5,837
5,117
5,346
5,220
4,325
Less: BOLI Death Benefit
1,460
-
-
-
-
Efficiency ratio denominator
$
40,833
$
42,117
$
42,826
$
41,664
$
40,374
Efficiency ratio
68.80
%
66.24
%
66.34
%
64.44
%
62.60
%
12
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Mid Penn Bancorp Inc. published this content on
24 April 2024 and is solely responsible for the information contained therein. Distributed by
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Mid Penn Bancorp, Inc. is a financial holding company. Its operations are conducted by Mid Penn Bank and its nonbank subsidiaries are engaged in commercial banking and trust business. It provides full-service commercial banking and financial services, including mortgage and home equity loans, secured and unsecured commercial and consumer loans, lines of credit, construction financing, farm loans, community development and local government loans and various types of time and demand deposits. It offers services to commercial businesses and real estate investors, consumers, nonprofit organizations, and municipalities through its 49 full-service retail banking properties. Its investment portfolio includes the United States Treasury and United States government agencies, mortgage-backed United States government agencies, and corporate bonds. It also offers other services, such as online banking, telephone banking, cash management services, automated teller services and safe deposit boxes.