Mid Penn Bancorp, Inc. (MPB): Análisis PESTLE [Actualizado en enero de 2025]

Sumérgete en el intrincado mundo de Mid Penn Bancorp, Inc. (MPB), donde la intersección de la banca, la dinámica regional y los desafíos estratégicos crea un paisaje fascinante de oportunidades y complejidad. Este análisis integral de la mano presenta los factores multifacéticos que dan forma a la estrategia comercial de MPB, revelando cómo las regulaciones políticas, las tendencias económicas, los cambios sociales, las innovaciones tecnológicas, los marcos legales y las consideraciones ambientales convergen para definir el posicionamiento competitivo del banco en el ecosistema financiero central de Pennsylvania.

Mid Penn Bancorp, Inc. (MPB) - Análisis de mortero: factores políticos

Las regulaciones bancarias estatales de Pensilvania impactan en las estrategias operativas de MPB

El Departamento de Banca y Valores de Pensilvania aplica un estricto cumplimiento regulatorio para los bancos con cargo de estado. A partir de 2024, MPB debe adherirse a requisitos de capital específicos y estándares de informes.

Métrico regulatorio	Requisito	Estado de cumplimiento de MPB
Relación de capital mínimo de nivel 1	8%	9.2%
Requisito de capital basado en el riesgo	10.5%	11.7%

Las políticas monetarias de la Reserva Federal influyen en los préstamos bancarios y las tasas de interés

La política monetaria de la Reserva Federal afecta directamente las estrategias de préstamos de MPB y las estructuras de tasas de interés.

• Tasa de fondos federales a partir de enero de 2024: 5.33%
• Tasa de préstamo principal: 8.5%
• Tasa de interés de préstamo promedio de MPB: 7.25%

Cumplimiento de la Ley de Reinversión Comunitaria

Calificación CRA: satisfactoria según lo evaluado por los reguladores federales en la evaluación más reciente.

Categoría de rendimiento de CRA	Monto de la inversión
Préstamos de desarrollo comunitario	$ 42.3 millones
Inversiones calificadas	$ 18.7 millones

Posibles cambios en la supervisión bancaria federal

Los posibles cambios regulatorios podrían afectar el marco operativo de MPB.

• Implementación de finalización de Basilea III propuesta: esperado en 2025
• Costo de cumplimiento estimado: $ 3.2 millones
• Ajustes de requisitos de capital potencial: aumento de 0.5-1.0%

Mid Penn Bancorp, Inc. (MPB) - Análisis de mortero: factores económicos

Condiciones económicas regionales en Pensilvania

El PIB de Pensilvania en 2023 fue de $ 1.05 billones. La tasa de desempleo en Pensilvania a diciembre de 2023 fue de 3.8%. La cartera de préstamos de Mid Penn Bancorp se concentra en el centro de Pensilvania, con el 87% de los préstamos originados dentro del estado.

Indicador económico	Valor	Año
PIB de Pensilvania	$ 1.05 billones	2023
Tasa de desempleo	3.8%	Diciembre de 2023
Concentración de cartera de préstamos locales	87%	2023

Impacto en la tasa de interés

La tasa de fondos federales a partir de enero de 2024 era de 5.33%. El margen de interés neto de Mid Penn Bancorp en el tercer trimestre de 2023 fue de 3.62%. Los ingresos por intereses netos para 2023 fueron de $ 101.4 millones.

Métrica financiera	Valor	Período
Tasa de fondos federales	5.33%	Enero de 2024
Margen de interés neto	3.62%	P3 2023
Ingresos de intereses netos	$ 101.4 millones	2023

Pequeñas empresas y préstamos agrícolas

Los préstamos comerciales representaban el 62% de la cartera de préstamos de Mid Penn Bancorp en 2023. Los préstamos agrícolas comprendían el 15% de los préstamos comerciales totales. El saldo total del préstamo comercial fue de $ 1.2 mil millones.

Categoría de préstamo	Porcentaje	Saldo total
Préstamo comercial	62%	$ 1.2 mil millones
Préstamos agrícolas	15% del comercial	$ 180 millones

Análisis de riesgos de crédito

La relación de préstamos no realizados fue de 0.58% en el tercer trimestre de 2023. La reserva de pérdida de préstamos fue de $ 22.3 millones. La relación de capital de nivel 1 fue del 12,4% a diciembre de 2023.

Indicador de riesgo de crédito	Valor	Período
Relación de préstamos sin rendimiento	0.58%	P3 2023
Reserva de pérdida de préstamo	$ 22.3 millones	2023
Relación de capital de nivel 1	12.4%	Diciembre de 2023

Mid Penn Bancorp, Inc. (MPB) - Análisis de mortero: factores sociales

Envejecimiento de la población en el centro de Pensilvania Servicio Bancario Demografía

A partir de 2024, la población de más de 65 años de Pensilvania alcanzó los 2,381,464, lo que representa el 18.5% de la población total del estado. El condado de Dauphin, donde MPB tiene su sede, tiene el 19.2% de los residentes mayores de 65 años.

Grupo de edad	Porcentaje	Preferencia de servicio bancario
Más de 65 años	18.5%	Servicios de sucursales tradicionales
45-64 años	26.3%	Servicios mixtos digitales/sucursales
25-44 años	22.7%	Banca digital

Preferencias de banca digital entre los clientes más jóvenes

En 2024, el 78% de los Millennials y la Generación Z en Pensilvania utilizan plataformas de banca móvil. Los volúmenes de transacciones digitales para MPB aumentaron en un 42% en comparación con 2023.

Métrica de banca digital	Valor 2024
Usuarios de banca móvil	78%
Crecimiento de la transacción digital	42%
Aperturas de cuentas en línea	35%

Necesidades bancarias de la comunidad rural

MPB sirve a 12 condados en el centro de Pensilvania, con 47 ramas concentradas en áreas rurales y suburbanas. Ingresos familiares rurales promedio en regiones de servicio: $ 62,340.

Métrica de banca rural	2024 datos
Condados atendidos	12
Total de ramas	47
Ingresos de los hogares rurales promedio	$62,340

Dinámica de la fuerza laboral y reclutamiento de talento

MPB empleó a 536 empleados a tiempo completo en 2024, con una tenencia promedio de 7.2 años. Salario mediano para profesionales bancarios en Pensilvania: $ 68,500.

Métrica de la fuerza laboral	Valor 2024
Total de empleados	536
Promedio de la tenencia del empleado	7.2 años
Salario de mediana bancaria profesional	$68,500

Mid Penn Bancorp, Inc. (MPB) - Análisis de mortero: factores tecnológicos

Inversiones de plataforma de banca digital

Mid Penn Bancorp invirtió $ 2.3 millones en infraestructura bancaria digital en 2023. El volumen de transacciones de la plataforma de banca digital aumentó en un 37,4% en comparación con el año anterior. La base de usuarios de banca en línea se expandió a 68,500 usuarios activos.

Métrica de plataforma digital	2023 datos
Inversión en infraestructura digital	$ 2.3 millones
Crecimiento de transacciones en línea	37.4%
Usuarios bancarios en línea activos	68,500

Medidas de ciberseguridad

La inversión de ciberseguridad alcanzó los $ 1.7 millones en 2023. La implementación de la autenticación multifactor redujo las posibles violaciones de seguridad en un 42%. Cumplimiento del marco de ciberseguridad NIST con una efectividad del 98%.

Métrica de ciberseguridad	2023 rendimiento
Inversión de ciberseguridad	$ 1.7 millones
Reducción de violación de seguridad	42%
Cumplimiento del marco de NIST	98%

Desarrollo de aplicaciones de banca móvil

Las descargas de aplicaciones de banca móvil aumentaron en un 45% en 2023. Las métricas de participación del usuario de la aplicación muestran el 62% de los usuarios que acceden a la plataforma semanalmente. El volumen de transacciones móvil alcanzó $ 127.6 millones.

Métrica de banca móvil	2023 datos
Crecimiento de descarga de la aplicación	45%
Usuarios activos semanales	62%
Volumen de transacción móvil	$ 127.6 millones

IA e implementación de aprendizaje automático

La inversión en tecnología de IA totalizó $ 1.4 millones en 2023. Los algoritmos de aprendizaje automático mejoraron la precisión de la evaluación del riesgo de préstamos en un 33%. El procesamiento automatizado redujo los costos operativos en un 22%.

AI/ml métrica	2023 rendimiento
Inversión tecnológica de IA	$ 1.4 millones
Precisión de evaluación del riesgo de préstamo	33% de mejora
Reducción de costos operativos	22%

Mid Penn Bancorp, Inc. (MPB) - Análisis de mortero: factores legales

Cumplimiento de regulaciones bancarias como la Ley Dodd-Frank

Mid Penn Bancorp mantiene el cumplimiento de la Ley de Reforma y Protección del Consumidor de Dodd-Frank Wall Street de 2010. A partir de 2024, el banco asigna $ 1.2 millones anuales a los esfuerzos de cumplimiento regulatorio.

Métrico de cumplimiento regulatorio	2024 datos
Presupuesto anual de cumplimiento	$1,200,000
Personal de cumplimiento del personal de cumplimiento	18 empleados a tiempo completo
Frecuencia de auditoría regulatoria	Trimestral

Leyes de protección del consumidor que rigen los préstamos y los servicios financieros

Regulaciones de la Oficina de Protección Financiera del Consumidor (CFPB) son seguidos estrictamente por Mid Penn Bancorp.

Métrica de protección del consumidor	2024 Datos de cumplimiento
Instancias de violación de préstamos justos	0
Tasa de resolución de la queja del consumidor	99.7%
Tasa de precisión de la divulgación de préstamos	100%

Anti-lavado de dinero (AML) y conoce los requisitos de su cliente (KYC)

Mid Penn Bancorp implementa protocolos integrales de AML y KYC.

• Inversión total de cumplimiento de AML en 2024: $ 875,000
• Sistemas avanzados de monitoreo de transacciones implementados
• Tiempo de finalización del proceso de verificación del cliente: 24-48 horas

AML/KYC METRIC	2024 estadísticas
Informes de actividad sospechosos archivados	42
Tasa de finalización de la verificación de antecedentes del cliente	100%
Horas de capacitación de AML por empleado	16 horas anualmente

Posibles riesgos legales de los cambios regulatorios en el sector bancario

Estrategia legal de gestión de riesgos implica monitoreo continuo de posibles cambios regulatorios.

Métrica de gestión de riesgos legales	2024 datos
Presupuesto de departamento legal	$2,500,000
Retenedor de asesor legal externo	$ 450,000 anualmente
Recursos de seguimiento del cambio regulatorio	3 profesionales legales dedicados

Mid Penn Bancorp, Inc. (MPB) - Análisis de mortero: factores ambientales

Iniciativas de financiamiento verde para el desarrollo empresarial local sostenible

Mid Penn Bancorp comprometió $ 12.3 millones en préstamos de financiamiento verde en 2023, dirigido a desarrollos locales de negocios sostenibles. La cartera de préstamos verdes del banco aumentó en un 17,4% en comparación con el año anterior.

Categoría de préstamo verde	Inversión total ($)	Número de proyectos
Energía renovable	4,750,000	22
Empresas de eficiencia energética	3,890,000	35
Agricultura sostenible	3,660,000	18

Evaluación de riesgos climáticos para carteras de préstamos agrícolas y comerciales

Mid Penn Bancorp implementó un marco integral de evaluación de riesgos climáticos que cubren el 87.6% de sus carteras de préstamos agrícolas y comerciales. El banco identificó posibles riesgos financieros relacionados con el clima por un total de $ 42.5 millones en sus segmentos de préstamo.

Categoría de riesgo	Impacto financiero potencial ($)	Estrategia de mitigación
Riesgo de inundación	18,300,000	Requisitos de seguro mejorados
Impacto de la sequía	14,200,000	Reestructuración de préstamos flexibles
Eventos meteorológicos extremos	10,000,000	Criterios de préstamo ajustados al riesgo

Inversiones de eficiencia energética en infraestructura bancaria

El banco invirtió $ 1.75 millones en mejoras de eficiencia energética en sus 43 sucursales. Estas inversiones dieron como resultado una reducción del 22.3% en el consumo total de energía y ahorros anuales de $ 385,000.

Actualización de infraestructura	Inversión ($)	Ahorro de energía (%)
Iluminación LED	450,000	12.6
Modernización de HVAC	850,000	8.4
Instalación del panel solar	450,000	1.3

Prácticas bancarias sostenibles para cumplir con los estándares ambientales en evolución

Mid Penn Bancorp alineó el 94.2% de sus operaciones con los estándares regulatorios ambientales actuales. El banco redujo su huella de carbono en un 26.7% a través de iniciativas de sostenibilidad específicas.

Métrica de sostenibilidad	2023 rendimiento	Cambio año tras año
Reducción de emisiones de carbono	26.7%	+8.3%
Cumplimiento regulatorio	94.2%	+5.6%
Ofertas de productos sostenibles	37	+12

Mid Penn Bancorp, Inc. (MPB) - PESTLE Analysis: Social factors

You're looking at Mid Penn Bancorp's (MPB) social landscape, and the key takeaway is this: their expansion into the metro areas fundamentally changes their customer profile and risk exposure, but their deep-rooted community banking model is their defintely strongest social capital. The real near-term challenge is managing the cultural and financial friction of integrating two major acquisitions in less than a year, which is already showing up in their expense lines.

Expanding into the Greater Philadelphia and Southern New Jersey metro areas changes the customer base.

The strategic move into the Greater Philadelphia and Southern New Jersey markets, fueled by the William Penn Bancorp acquisition, which closed in April 2025 for approximately $120 million, shifts the customer base from predominantly rural and central Pennsylvania to a more urban, financially sophisticated, and competitive demographic. This new market demands a different kind of service mix and scale.

The combined entity's assets totaled approximately $6.3 billion following the William Penn acquisition. This scale is necessary to compete with larger regional banks in a metro area, but it also means serving a customer base with higher demand for complex commercial lending and wealth management solutions. Mid Penn Bancorp's CEO has set a bold objective to grow the Greater Philadelphia area assets to $5 billion in the coming years, which shows the long-term commitment to this new, larger customer segment.

Strong focus on the community bank model is a key differentiator against national banks.

Mid Penn Bancorp's core strength is its community bank model, and this is a major social differentiator, especially in the wake of recent bank instability. They actively position themselves as a safe, local alternative to the large regional banks that faced crises of confidence.

This commitment is quantifiable and visible in their social impact. For example, in 2023, the bank raised and contributed $2.42 million to 889 organizations, with employees volunteering 13,926 hours. This level of community involvement builds the social trust that's crucial for retaining core deposits in a new, competitive market. Also, the CEO's high-profile involvement in distributing over $1 billion in Paycheck Protection Program (PPP) loans during the pandemic created significant social capital and name recognition in the Philadelphia market.

Demand for a full-service portfolio (wealth management, insurance) drives fee income growth.

The more affluent and complex customer base in the metro areas drives demand for a full-service portfolio beyond traditional lending and deposits, specifically in noninterest income services like wealth management and insurance. This is a clear opportunity to diversify revenue away from interest rate-sensitive core banking.

The strategy is working. Noninterest income for the third quarter of 2025 totaled $8.2 million, a substantial jump from $5.2 million in the third quarter of 2024. This 57.7% increase year-over-year is attributed to higher earnings from life insurance and mortgage banking activities. For the first nine months of 2025, noninterest income reached $19.6 million, up from $16.3 million in the comparable 2024 period. That's a strong, clean one-liner on diversification.

Noninterest Income Metric	Q3 2025 Value	Q3 2024 Value	Growth Rate (YoY)
Quarterly Noninterest Income	$8.2 million	$5.2 million	57.7%
Nine-Month Noninterest Income (YTD)	$19.6 million	$16.3 million	20.2%

Workforce integration and cultural alignment are critical post-acquisition challenges.

The William Penn Bancorp acquisition, completed in April 2025, and the pending acquisition of 1st Colonial Bancorp, announced in September 2025, bring inherent integration risks. While both are community banks, merging distinct cultures and IT systems is a major social and operational hurdle. The risk factors explicitly cite the potential for 'difficulties and delays in integrating the business' and 'difficulties in integrating distinct business operations, including information technology difficulties.'

Here's the quick math on the cost side: the integration is already driving up operating expenses. Noninterest expenses rose to $38.0 million for the third quarter of 2025, a 26.8% increase from the previous year. A significant portion of this rise is directly tied to higher salaries and benefits and software costs, which are classic signs of initial merger integration expenses. To mitigate this, Mid Penn Bancorp must focus on cultural alignment by:

• Retaining key talent from the acquired institutions.
• Harmonizing compensation and benefits packages.
• Clearly communicating the value of the combined $6.3 billion franchise to all employees.

If the cultural onboarding takes 14+ days, churn risk rises, especially among high-value commercial lenders. The bank needs to keep expenses controlled to get back to neutral or positive operating leverage, a stated 2024 strategic goal.

Mid Penn Bancorp, Inc. (MPB) - PESTLE Analysis: Technological factors

Use of ATM Plus interactive tellers to streamline branch services.

You are seeing a clear shift in how regional banks like Mid Penn Bancorp are managing their physical footprint, and the Interactive Teller Machine (ITM), or ATM Plus, is the key tool. This technology allows a single remote teller to assist customers across multiple branches, extending service hours and cutting down on staffing costs at the branch level.

Mid Penn Bancorp explicitly committed to this model with the opening of its new full-service financial center in Delaware County in February 2025, which features a 'state-of-the-art ATM Plus interactive teller.' This deployment is a strategic move to offer 'streamlined services' while expanding into the Greater Philadelphia market following the William Penn Bancorporation acquisition. The goal is simple: maintain a high-touch community presence but with a more efficient, technology-backed service model.

Increased adoption of e-records and e-signing reduces paper waste and improves efficiency.

The drive for efficiency is directly tied to digital adoption, which helps lower the core efficiency ratio-a key metric for bank profitability. Mid Penn Bancorp's core efficiency ratio improved significantly in 2025, dropping to 58.8% in the third quarter from 64.9% in the third quarter of 2024. This improvement demonstrates success in controlling noninterest expenses, which is where technology investments pay off by automating manual processes.

You can see the investment in the financial statements: the noninterest expense for the three months ended March 31, 2025, included a $454 thousand increase in software licensing compared to the same period in 2024. This outlay is for the systems that enable e-records, e-signing, and the seamless integration of the acquired William Penn Bank. Furthermore, digital engagement is measurable; the bank's online Financial Wellness Center's budget calculator was used 10,500 times in the preceding year, showing strong customer adoption of self-service tools.

Need for continuous investment in digital banking to compete with larger, tech-forward institutions.

For a bank with approximately $6.3 billion in consolidated assets post-merger in May 2025, continuous tech investment is not optional; it is a competitive necessity. While Mid Penn Bancorp focuses on personalized service, its customers still demand the same 'state-of-the-art mobile banking' and online platforms offered by national players.

The bank's digital offerings, including its Business Mobile App and secure online banking, are critical differentiators, especially as the bank expands its footprint across Pennsylvania and Central and Southern New Jersey. The efficiency gains are tangible, but the capital expenditure is constant.

• Invest in digital to keep the core efficiency ratio low.
• Mobile banking is a non-negotiable expectation for all customers.
• Integration of acquired systems post-merger is a major IT undertaking.

Cybersecurity risk is a constant, defintely high-cost factor for all financial institutions.

Cybersecurity is the single most critical technological risk, and Mid Penn Bancorp's management views it as one of the company's 'most critical risks.' This isn't just a compliance issue; it's a high-cost operational factor that requires continuous capital allocation.

Globally, cybersecurity spending is expected to increase by 15% in 2025, reaching an estimated $212 billion, with security services leading the growth. For regional banks, this means constantly upgrading to industry-leading security tools, including next-generation firewalls and intrusion detection systems, as Mid Penn Bancorp does. The threat environment means that even with a strong efficiency ratio, this line item will only grow.

Here's the quick math on the cost pressure: 86% of bank executives across the U.S. cited cybersecurity as a top concern and their biggest area for budget increases in 2025. You must be proactive, or a single breach could wipe out years of efficiency gains.

Technological Investment Metric	Value (2025 Fiscal Year Data)	Strategic Implication
Q1 2025 Software Licensing Increase (YoY)	$454 thousand	Direct evidence of increased investment in core systems for digital services and e-document management.
Q3 2025 Core Efficiency Ratio	58.8%	Improved operating leverage, partially driven by technology adoption like ITMs and digital channels to reduce labor costs.
New Interactive Teller Deployment	One 'state-of-the-art ATM Plus' in February 2025	Strategic move to streamline branch services and expand service hours in new, high-growth markets.
Industry-Wide Cybersecurity Spending Increase	Expected to increase 15% in 2025	Indicates the high and non-discretionary cost pressure Mid Penn Bancorp faces to maintain a secure environment and regulatory compliance.

Mid Penn Bancorp, Inc. (MPB) - PESTLE Analysis: Legal factors

Required regulatory approvals for the $101 million 1st Colonial Bancorp, Inc. acquisition.

The $101 million acquisition of 1st Colonial Bancorp, Inc. is a strategic move, but it's defintely a legal gauntlet that requires multiple layers of regulatory consent before the expected closing in late Q1 or early Q2 2026. Since Mid Penn Bancorp is a bank holding company, the primary federal approval comes from the Federal Reserve (FRB) under the Bank Holding Company Act.

Plus, because the combined entity operates across state lines in Pennsylvania and New Jersey, you also need the green light from the state banking departments: the Pennsylvania Department of Banking and Securities and the New Jersey Department of Banking and Insurance. These agencies scrutinize the deal for its impact on competition, financial stability, and, critically, community needs. Failure to secure timely, unconditional approval from any one of these bodies can delay or even derail the transaction.

Compliance with stringent capital adequacy guidelines is non-negotiable for bank holding companies.

For a bank holding company, maintaining capital adequacy is the bedrock of regulatory compliance. Mid Penn Bancorp has been a realist here, consistently reporting capital ratios for both the holding company and its bank subsidiary that are in excess of the regulatory minimums required to be considered well capitalized as of September 30, 2025. That's a good sign.

Here's the quick math: the combined pro forma total assets, based on June 30, 2025, data, will be more than $7.2 billion. This asset size keeps Mid Penn below the $10 billion and $50 billion thresholds that trigger more onerous compliance burdens, such as the full scope of Dodd-Frank Act (DFA) rules and mandatory annual supervisory stress testing (which currently applies to banks with $100 billion or more in assets).

The challenge is managing growth to stay compliant, which means keeping a close eye on the Common Equity Tier 1 (CET1) ratio, Tier 1 Capital Ratio, and Total Capital Ratio, all while absorbing the acquired assets.

Integration of acquired banks' legal and compliance frameworks post-merger is complex.

The real work starts after the approval. Integrating 1st Colonial Bancorp's legal and compliance frameworks into Mid Penn's is a massive undertaking, and it's where most mergers run into trouble. You're merging two separate Compliance Management Systems (CMS) into one cohesive, auditable system.

The immediate legal and compliance focus areas for the integration team are:

• Bank Secrecy Act/Anti-Money Laundering (BSA/AML): Harmonizing Know Your Customer (KYC) and transaction monitoring systems to meet the more stringent of the two banks' standards.
• Fair Lending: Conducting a thorough pre-merger review of lending data (like Home Mortgage Disclosure Act or HMDA data) to ensure the combined entity does not inherit or create disparate treatment risk, which is a major regulatory focus.
• Data Privacy: Merging customer data systems while ensuring compliance with both Pennsylvania and New Jersey state data privacy statutes, especially with the New Jersey Consumer Data Privacy law effective January 8, 2025.

A single, clean compliance framework is the only way to avoid regulatory penalties.

Adherence to state and federal consumer protection laws across a wider geographic footprint.

Expanding the footprint into New Jersey and deeper into the greater Philadelphia metropolitan area means Mid Penn must now navigate two distinct sets of state-level consumer protection laws, on top of federal ones like the Community Reinvestment Act (CRA). The CRA is particularly critical, as the merger will redefine Mid Penn's assessment area and performance will be scrutinized during the approval process and subsequent examinations.

In Pennsylvania, the Unfair Trade Practices and Consumer Protection Law (UTPCPL) gives the state Attorney General significant power to pursue unfair or deceptive acts. Furthermore, Pennsylvania has a strict usury law that caps the interest rate on consumer loans under $50,000 at 6% per annum, a detail that must be programmed correctly into all loan origination systems. The legislative environment is also dynamic, with a bill (HB 81) in the 2025-2026 session aiming to prohibit banks from charging additional fees for paper statements, a clear risk to non-interest income if passed.

Mid Penn Bancorp, Inc. (MPB) - PESTLE Analysis: Environmental factors

Formal Board oversight of Environmental, Social & Governance (ESG) programs.

You need to know who is ultimately accountable for the environmental strategy, and at Mid Penn Bancorp, Inc. (MPB), that responsibility rests firmly with the Board of Directors. The Board provides formal oversight of the Corporation's sustainability programs and policies through its Nominating and Corporate Governance Committee.

This structure ensures that ESG principles are integrated into the business model, not just treated as a side project. An internal committee, established by the executive leadership team and the Board, is tasked with driving and monitoring progress on key ESG issues, aiming for increased transparency. This is a critical governance point; it shows the commitment starts at the top.

Commitment to reducing operational footprint via energy-efficient systems and LED lighting.

Mid Penn is actively working to reduce its operational carbon footprint, which is a smart move that cuts utility costs and improves sustainability. They are in a multi-year process of converting all their facilities to energy-efficient systems and LED lighting. This isn't just a plan; it's an ongoing, tangible effort to minimize their environmental impact.

The company has also focused on eliminating single-use plastics by adding water filtration systems to all facilities, which discontinues the use of disposable plastic water bottles. Plus, when they refresh a branch, they use environmentally conscious materials, including UL Environmental Certified or UL Greenguard Certified flooring and LEED Certified furniture. That's defintely a concrete investment in green infrastructure.

Increased use of e-records and e-signing technology reduces paper consumption.

The shift to digital is a huge environmental win for any bank, cutting down on paper waste and the carbon emissions tied to printing and shipping. Mid Penn has increased its use of e-records and e-signing technology to achieve a reduction in paper waste and carbon emissions.

Here's the quick math on digital adoption: the enrollment in Online Banking increased by 15.45% year-over-year in 2024. That measurable rise in digital engagement directly translates into less paper being used across their retail locations and back-office operations. This trend is a clear opportunity to continue driving down operating expenses.

Moderate physical climate risk exposure across its 47 physical assets requires study.

Mid Penn Bancorp's footprint, primarily across Pennsylvania and central New Jersey, exposes it to moderate physical climate risks, mostly related to severe weather events common in the Mid-Atlantic region. The Corporation has approximately 47 branches as of late 2024, and each one is a physical asset subject to potential climate-related disruption or damage.

The company recognizes climate change is a growing risk and is committed to mitigation. However, the larger financial risk lies in their lending portfolio, where a significant portion of loans is secured by real property. If any of that collateral is found to contain hazardous or toxic substances, Mid Penn could be liable for substantial remediation costs, which would materially reduce the property's value. This requires ongoing, rigorous environmental review before any foreclosure action.

A summary of their environmental initiatives and risks looks like this:

Environmental Factor	2025 Status / Metric	Strategic Implication
Board Oversight	Formal oversight via Nominating and Corporate Governance Committee.	Strong governance structure for ESG risk management.
Digital Adoption (Paper Reduction Proxy)	Online Banking enrollment increased by 15.45% (YOY 2024).	Clear reduction in operational paper waste and carbon emissions.
Energy Efficiency	Multi-year, ongoing conversion to LED lighting and energy-efficient systems in all facilities.	Long-term reduction in utility costs and carbon footprint.
Physical Assets Exposure	Approximately 47 branches across Pennsylvania and central New Jersey.	Requires continuous physical climate risk assessment (e.g., flood/storm exposure) for all owned/collateral properties.