Mid Penn Bancorp, Inc. (MPB): SWOT Analysis [Nov-2025 Updated]

You're tracking Mid Penn Bancorp's (MPB) aggressive 2025 expansion, and the picture is one of high-stakes growth: their proven M&A strategy is pushing pro forma assets over $7.2 billion, but it's defintely straining the balance sheet right now. While the Net Interest Margin (NIM) expanded to a strong 3.60%, noninterest expense surged 34.3% year-to-date, crushing profit margins down to 9.1% in Q2 2025. That's the core tension-massive scale versus immediate operational drag-plus, we need to watch the rise in Nonperforming Assets (NPA) to $25.4 million. Let's map out the full SWOT to see if the near-term pain justifies the long-term payoff and what actions you should take.

Mid Penn Bancorp, Inc. (MPB) - SWOT Analysis: Strengths

Net Interest Margin (NIM) Expanded to a Strong 3.60% in Q3 2025

You want to see a bank make money on its core business, and Mid Penn Bancorp, Inc. (MPB) is defintely delivering. The company's Net Interest Margin (NIM), which is a key measure of profitability from lending, expanded significantly in the third quarter of 2025, reaching 3.60%. This NIM is up 16 basis points (bps) from the 3.44% reported in the second quarter of 2025. The improvement shows good management of both asset yields and deposit costs, a tricky balance in the current rate environment. Honestly, a 47 bps year-over-year jump from the 3.13% in Q3 2024 is a clear signal of strong operational execution.

The NIM expansion was a major driver of the quarter's strong financial performance. Here's the quick math on the NIM trend:

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Margin (NIM)	3.13%	3.44%	3.60%
Sequential Increase (QoQ)	N/A	N/A	+16 bps

Well-Capitalized, Exceeding All Minimum Regulatory Capital Ratios

As a seasoned investor, you know that a strong capital base is the ultimate safety net, and Mid Penn Bancorp is rock solid here. The bank is classified as 'well capitalized,' which means its capital ratios are not just above the regulatory minimums, they exceed them comfortably. This substantial capital buffer provides the financial stability needed to absorb unexpected losses and continue strategic growth, plus it reassures regulators and the market.

For example, the Common Equity Tier 1 (CET1) ratio, a crucial measure of a bank's core capital strength, stood at 13.85% as of September 30, 2025. That's a very healthy number, and it's a key factor supporting their ongoing acquisition strategy. A high CET1 ratio gives management flexibility; they can pursue growth without immediate pressure to raise more capital. The bank also maintains significant liquidity, with capacity reaching $1.7 billion, which is 176% of uninsured deposits.

Proven M&A Track Record, Completing the William Penn Acquisition in April 2025

Mid Penn Bancorp has a history of disciplined, successful mergers and acquisitions (M&A). They've completed six whole-bank acquisitions since 2014, and their most recent, the William Penn Bancorporation deal, closed after the market on April 30, 2025. This all-stock transaction was valued at approximately $120 million and was a strategic move to expand their footprint.

The William Penn acquisition was crucial because it extended the bank's reach into the attractive Greater Philadelphia and Southern New Jersey markets. This is not just about getting bigger; it's about getting into better, higher-growth markets. The acquisition immediately contributed to the balance sheet, adding approximately $405 million in loans and $620 million in deposits.

Long-Standing Commitment to Shareholders with a 60th Consecutive Quarterly Dividend

Mid Penn Bancorp's commitment to returning capital to shareholders is a clear strength, showing financial discipline and confidence in future earnings. The company has a long-standing track record of dividend payments, having declared its 60th consecutive quarterly dividend in the third quarter of 2025.

The most recent dividend declared was a cash dividend of $0.22 per common share, payable on November 24, 2025. This represents a 10% increase from the previous quarterly dividend of $0.20 per share, a strong signal to income-focused investors. This consistent growth and payment history makes the stock particularly attractive for those seeking high shareholder yield.

Balance Sheet Growth with Assets Reaching Approximately $6.3 Billion as of September 30, 2025

The strategic M&A activity has translated directly into tangible balance sheet expansion. As of September 30, 2025, Mid Penn Bancorp's total assets stood at approximately $6.27 billion. This marks a significant 14.6% growth since the end of 2024, largely fueled by the William Penn acquisition. The combined entity created by the merger immediately had consolidated assets of about $6.3 billion, establishing a larger, more powerful community banking franchise.

The key components of this balance sheet growth include:

• Total assets of approximately $6.27 billion as of September 30, 2025.
• Total loans increased 8.5% year-to-date to $4.8 billion.
• Total deposits rose 13.9% year-to-date to $5.3 billion.

This scale increase provides better operating leverage and a stronger platform for future organic and inorganic growth. Finance: draft a comparative analysis of MPB's Q3 2025 NIM versus its regional peer group by Friday.

Mid Penn Bancorp, Inc. (MPB) - SWOT Analysis: Weaknesses

Noninterest Expense Surged 34.3% Year-to-Date 2025, Driven by M&A Costs

You're seeing the immediate, painful side of an aggressive merger and acquisition (M&A) strategy: a sharp increase in operating expenses that eats into your bottom line. Mid Penn Bancorp, Inc.'s total noninterest expense for the first nine months of 2025 ballooned to $116.4 million. This represents a significant increase of $29.7 million, or 34.3%, compared to the $86.7 million recorded in the same period in 2024.

The core driver here is the cost of integrating the William Penn Bancorporation acquisition. Here's the quick math: M&A-related expenses, including those for the William Penn and Charis Insurance Group deals, accounted for $11.4 million of that nine-month total. This expense bloat is defintely challenging the bank's ability to show strong operating leverage, meaning expenses are growing faster than revenue. Management needs to execute those planned cost synergies, and fast.

Profit Margin Compression, Dropping to 9.1% in Q2 2025

The impact of those merger costs hit the second quarter's profitability hard, creating a misleadingly weak headline number. Mid Penn's GAAP profit margin plummeted to just 9.1% in the second quarter of 2025, a dramatic drop from the 28% margin reported a year prior in Q2 2024. This margin compression resulted in net income of only $4.76 million for the quarter, compared to $11.8 million in the prior-year period.

What this estimate hides is the one-time nature of the expenses. The GAAP (Generally Accepted Accounting Principles) net income figure included $8.7 million of after-tax merger-related expenses and another $1.6 million in non-recurring compensation costs. Still, investors focus on GAAP earnings, and a single-digit profit margin is a clear weakness that requires explanation and a swift return to historical levels.

Nonperforming Assets (NPA) Rose to $25.4 Million in Q1 2025, a Trend to Watch

While the overall asset quality remains manageable, the upward trend in nonperforming assets (NPA) is a material weakness we must monitor, especially in a slowing economy. At the end of Q1 2025, total nonperforming assets stood at $25.4 million. This figure is a notable increase from $22.7 million at the end of 2024 and $15.5 million a year earlier.

The Q1 jump was primarily driven by the addition of three commercial loans with a combined balance of $7.0 million being moved to non-accrual status. This is a concentrated credit event that raises questions about underwriting quality, particularly in the Commercial Real Estate (CRE) portfolio. The trend continued into Q2 and Q3, with NPA reaching $28.0 million at June 30, 2025, and then $27.3 million at September 30, 2025.

Metric	Q1 2024	Q4 2024	Q1 2025
Total Nonperforming Assets (NPA)	$15.5 million	$22.7 million	$25.4 million
Primary Driver of Q1 2025 Increase	N/A	N/A	Three commercial loans added ($7.0 million)

Noninterest Income Remains a Smaller Contributor at $19.6 Million for the First Nine Months of 2025

Mid Penn Bancorp, Inc. still relies heavily on net interest income, which is the difference between what it earns on loans and what it pays on deposits. Noninterest income, which is a key source of diversification for most banks, remains a smaller part of the revenue mix. For the first nine months of 2025, total noninterest income was $19.6 million.

While this is an increase of $3.2 million (or 19.7%) year-over-year, the bank's fee-based revenue streams are not yet robust enough to fully offset volatility in the core lending business. The Q1 2025 noninterest income actually fell 10.2% year-over-year to $5.2 million, mainly due to lower benefits from Bank-Owned Life Insurance (BOLI). This lack of consistent, high-margin fee income is a structural weakness.

Deposit Competition is Defintely Keeping Funding Costs Elevated

Even as the Federal Reserve's rate cuts in late 2024 provided some temporary relief, the regional banking market remains hyper-competitive for deposits, which keeps funding costs high. Though Mid Penn's cost of funds decreased sequentially in Q1 2025, the average cost of deposits for the quarter was still 2.45%. This highlights the persistent pressure to pay more to retain and attract customer funds, known as deposit beta (the speed at which deposit rates change in response to market rates).

The recent William Penn acquisition did bring in a tranche of lower-cost deposits, which helped the Q2 2025 cost of funds fall to 2.44%. But, excluding the acquisition, the bank faces ongoing deposit pricing headwinds in its core markets. The challenge is clear:

• Retain existing customers without raising rates too much.
• Compete with higher-yield offerings from national banks and money market funds.
• Manage the cost of newly acquired deposits once promotional rates expire.

Finance: draft a 13-week cash view by Friday, specifically modeling the interest expense impact if the average cost of deposits rises by 15 basis points.

Mid Penn Bancorp, Inc. (MPB) - SWOT Analysis: Opportunities

Bolstering footprint in the greater Philadelphia and Southern New Jersey markets.

The strategic focus on the Greater Philadelphia metropolitan area and Southern New Jersey represents a significant near-term opportunity for Mid Penn Bancorp. This expansion is not just about adding branches; it's about tapping into more dynamic, higher-growth markets outside of the bank's traditional central Pennsylvania base.

The two most recent bank acquisitions-William Penn Bancorp, which closed in May 2025, and the pending acquisition of 1st Colonial Bancorp-are the clear drivers here. These deals immediately increase market density and commercial lending opportunities in a highly desirable corridor. Honestly, this is how you build a regional powerhouse.

The 1st Colonial Bancorp deal, valued at approximately $101 million, specifically targets Southern New Jersey, where 1st Colonial operates two full-service branches and a loan production office, plus a third branch in Limerick, Pennsylvania.

• Gain three new full-service branches in the Philadelphia metro area.
• Secure an immediate leadership presence with 1st Colonial's CEO becoming the Greater Philadelphia Metro Area Market President.
• Accelerate disciplined growth in the southeastern PA and southern NJ regions.

Pending acquisition of 1st Colonial Bancorp will create pro forma assets over $7.2 billion.

The pending acquisition of 1st Colonial Bancorp, Inc. is a transformational event that significantly increases Mid Penn's scale, giving it more capacity to compete for larger commercial loans and invest in technology. This is a crucial step in moving from a community bank to a strong regional player.

Based on financial data as of June 30, 2025, the combined entity will cross a key psychological and operational threshold. The combined company's pro forma assets will exceed $7.2 billion, a substantial jump that provides greater financial resilience and market visibility.

Here's the quick math on the pro forma balance sheet, based on June 30, 2025, data:

Pro Forma Metric	Amount (as of June 30, 2025)
Total Assets	More than $7.2 billion
Total Deposits	Approximately $6.2 billion
Gross Loans	More than $5.4 billion
Total Branch Locations	More than 60

Expected immediate accretion to earnings per share (EPS) from recent deals.

The financial benefit of the recent M&A activity is expected to flow directly to the bottom line, providing an immediate boost to earnings per share (EPS). This is the whole point of a good acquisition: it has to pay for itself quickly.

Both the 1st Colonial Bancorp merger and the Cumberland Advisors acquisition are expected to be immediately earnings-accretive (meaning they increase the EPS right away). The 1st Colonial deal is projected to deliver an estimated 10% EPS accretion in 2026 and 14% in 2027, which is a significant lift for shareholders. The Cumberland deal is expected to be minimally accretive right away, at about 1%.

For the full 2025 fiscal year, the analyst consensus EPS forecast is $2.83. The expectation of immediate accretion from these deals, especially with Q3 2025 actual EPS already beating consensus at $0.77, suggests a defintely positive trajectory for 2026.

Expanding fee income through wealth management via the Cumberland Advisors acquisition.

The acquisition of Sarasota, Florida-based Cumberland Advisors is a smart move to diversify revenue away from traditional interest income and into higher-margin, less capital-intensive fee income. This is a key trend for regional banks seeking stability.

The deal, valued at about $5.5 million in stock and cash, with up to $2.2 million in potential additional payments, is expected to close in the fourth quarter of 2025. This immediately expands Mid Penn's wealth management and Registered Investment Advisory (RIA) capabilities. It's a clean way to add a new business line.

The new wealth management arm brings substantial assets and revenue, providing a stable, recurring fee stream:

• Add approximately $3.3 billion in new Assets Under Management (AUM).
• Integrate a firm with a year-to-date annualized revenue of $9.0 million as of June 30, 2025.
• Access a fee-for-service model that serves individuals and institutional investors nationwide and internationally.

Mid Penn Bancorp, Inc. (MPB) - SWOT Analysis: Threats

High risk of integration failure and delayed synergy realization from multiple 2025 acquisitions.

You've seen Mid Penn Bancorp, Inc. (MPB) execute an aggressive growth-by-acquisition strategy in 2025, but this pace introduces major integration risk. The bank completed the all-stock $120 million acquisition of William Penn Bancorporation on April 30, 2025, and followed up with the acquisition of Charis Insurance Group on May 12, 2025. Any time you merge two banks, you face culture clashes, technology migration headaches, and the real possibility of client attrition.

The immediate financial impact shows this friction: Total Noninterest Expense surged 27% sequentially to $38.0 million in the third quarter of 2025. This cost bloat was fueled by a significant $11.2 million in merger-related expenses for the William Penn deal alone in the first half of 2025. Honestly, that expense growth has outpaced Net Interest Income growth by 9 percentage points year-to-date. This kind of operational drag challenges the core profitability needed to justify the deal's valuation, and it's a clear threat to achieving the promised cost synergies on time.

Here's the quick math on the 2025 acquisitions:

• William Penn Bancorporation (Closed Q2 2025): Added $757.3 million in total assets.
• Charis Insurance Group (Closed Q2 2025): Added insurance business and related accounts.
• 1st Colonial Bancorp, Inc. (Announced Q3 2025, expected 2026): Valued at approximately $101 million.

Rising nonperforming assets, particularly in commercial credits, requiring stricter underwriting.

The quality of the loan book is deteriorating, which is a classic risk following an acquisition-led growth phase, especially in a challenging rate environment. Total Nonperforming Assets (NPAs) have been steadily climbing, hitting $27.3 million as of September 30, 2025. That's a 20% increase since the end of 2024, when NPAs stood at $22.7 million.

The problem is concentrated in commercial lending. In the first quarter of 2025, the NPA increase was primarily driven by the addition of three commercial loans with a combined balance of $7.0 million being placed on non-accrual. More acutely, foreclosed assets (Other Real Estate Owned or OREO) exploded 21,141% to $9.3 million in the third quarter of 2025, with $8.8 million of that concentrated in just two Commercial Real Estate (CRE) loans. This kind of sharp, concentrated deterioration in asset quality defintely requires a immediate and stricter review of underwriting standards, particularly for new commercial credits in the expanded markets.

Macroeconomic pressure on commercial real estate (CRE) loans in their expanded market.

The broader macroeconomic climate, plus the bank's expansion into new territories, creates a significant threat from Commercial Real Estate (CRE) exposure. The William Penn acquisition extended MPB's footprint into the Greater Philadelphia and Southern New Jersey metropolitan areas. These are markets currently facing significant headwinds in the office and retail sectors due to hybrid work models and high interest rates.

The recent spike in foreclosed assets is a direct consequence of this pressure. The $8.8 million in OREO tied to two CRE loans highlights the vulnerability of this portfolio. While total loans increased to $4.5 billion at March 31, 2025, a large portion of that growth is in commercial loans, which are now showing stress. The bank must navigate this new, larger CRE portfolio with caution, because one or two more large defaults could materially impact earnings and capital.

Increased compliance and regulatory scrutiny as the bank nears the $10 billion asset mark.

MPB's aggressive growth trajectory is pushing it toward a critical regulatory cliff. The $10 billion asset threshold is a major trigger point under the Dodd-Frank Act, where banks face significantly increased compliance costs and regulatory scrutiny, including the requirement for annual stress tests and more stringent capital and liquidity rules.

As of September 30, 2025, Mid Penn Bancorp's total assets stood at $6.3 billion. The announced acquisition of 1st Colonial Bancorp, Inc., while expected to close in 2026, would give the combined company pro forma total assets of more than $7.2 billion based on June 30, 2025, data. While still a few billion dollars away, the bank is on a clear path toward this threshold. The threat here is the non-linear jump in noninterest expense that will occur when they cross that line, impacting the efficiency ratio and shareholder returns. The cost of compliance at $10 billion often rises faster than the revenue generated from the asset growth that preceded it.

Metric	Value (as of Sept 30, 2025)	Change from Dec 31, 2024
Total Assets	$6.3 billion	Up 14.6% (Acquisition-driven)
Total Nonperforming Assets (NPAs)	$27.3 million	Up 20%
Foreclosed Assets (OREO)	$9.3 million	Up 21,141%
Merger-Related Expenses (H1 2025)	$11.2 million	N/A (New expense)