Mid Penn Bancorp, Inc. (MPB): Análise de Pestle [Jan-2025 Atualizado]

Mergulhe no intrincado mundo de Mid Penn Bancorp, Inc. (MPB), onde a interseção de bancos, dinâmica regional e desafios estratégicos cria um cenário fascinante de oportunidade e complexidade. Essa análise abrangente de pilotes revela os fatores multifacetados que moldam a estratégia de negócios da MPB, revelando como regulamentos políticos, tendências econômicas, mudanças sociais, inovações tecnológicas, estruturas legais e considerações ambientais convergem para definir o posicionamento competitivo do banco no ecossistema financeiro da Pensilvânia central.

Mid Penn Bancorp, Inc. (MPB) - Análise de Pestle: Fatores Políticos

Os regulamentos bancários do estado da Pensilvânia impactam as estratégias operacionais do MPB

O Departamento de Bancos e Valores Mobiliários da Pensilvânia impõe estrita conformidade regulatória para bancos estatais. A partir de 2024, o MPB deve aderir a requisitos de capital específicos e padrões de relatório.

Métrica regulatória	Exigência	Status de conformidade do MPB
Taxa de capital mínimo de nível 1	8%	9.2%
Requisito de capital baseado em risco	10.5%	11.7%

As políticas monetárias do Federal Reserve influenciam os empréstimos bancários e as taxas de juros

A política monetária do Federal Reserve afeta diretamente as estratégias de empréstimos e as estruturas da taxa de juros da MPB.

• Taxa de fundos federais em janeiro de 2024: 5,33%
• Taxa de empréstimos primários: 8,5%
• Taxa média de juros de empréstimo do MPB: 7,25%

Conformidade da Lei de Reinvestimento Comunitário

Classificação CRA: satisfatória conforme avaliado pelos reguladores federais na avaliação mais recente.

Categoria de desempenho do CRA	Valor do investimento
Empréstimos de desenvolvimento comunitário	US $ 42,3 milhões
Investimentos qualificados	US $ 18,7 milhões

Mudanças potenciais na supervisão bancária federal

As possíveis mudanças regulatórias podem afetar a estrutura operacional da MPB.

• Implementação de finalização proposta de Basileia III: esperado em 2025
• Custo estimado de conformidade: US $ 3,2 milhões
• Ajustes potenciais de requisitos de capital: aumento de 0,5-1,0%

Mid Penn Bancorp, Inc. (MPB) - Análise de Pestle: Fatores Econômicos

Condições econômicas regionais na Pensilvânia

O PIB da Pensilvânia em 2023 foi de US $ 1,05 trilhão. A taxa de desemprego na Pensilvânia em dezembro de 2023 foi de 3,8%. A carteira de empréstimos da Mid Penn Bancorp está concentrada no centro da Pensilvânia, com 87% dos empréstimos originados no estado.

Indicador econômico	Valor	Ano
PENT PENNSYLVANIA	US $ 1,05 trilhão	2023
Taxa de desemprego	3.8%	Dezembro de 2023
Concentração de portfólio de empréstimos locais	87%	2023

Impacto da taxa de juros

A taxa de fundos federais em janeiro de 2024 foi de 5,33%. A margem de juros líquidos do Mid Penn Bancorp no terceiro trimestre de 2023 foi de 3,62%. A receita de juros líquidos de 2023 foi de US $ 101,4 milhões.

Métrica financeira	Valor	Período
Taxa de fundos federais	5.33%	Janeiro de 2024
Margem de juros líquidos	3.62%	Q3 2023
Receita de juros líquidos	US $ 101,4 milhões	2023

Pequenas empresas e empréstimos agrícolas

Os empréstimos comerciais representaram 62% da carteira de empréstimos da Penn Bancorp em 2023. Empréstimos agrícolas compreendiam 15% do total de empréstimos comerciais. O saldo total de empréstimo comercial foi de US $ 1,2 bilhão.

Categoria de empréstimo	Percentagem	Balanço total
Empréstimos comerciais	62%	US $ 1,2 bilhão
Empréstimos agrícolas	15% do comercial	US $ 180 milhões

Análise de risco de crédito

A taxa de empréstimos sem desempenho foi de 0,58% no terceiro trimestre de 2023. A reserva de perda de empréstimo foi de US $ 22,3 milhões. O índice de capital de nível 1 foi de 12,4% em dezembro de 2023.

Indicador de risco de crédito	Valor	Período
Razão de empréstimos não-desempenho	0.58%	Q3 2023
Reserva de perda de empréstimo	US $ 22,3 milhões	2023
Índice de capital de camada 1	12.4%	Dezembro de 2023

Mid Penn Bancorp, Inc. (MPB) - Análise de Pestle: Fatores sociais

População envelhecida no centro da Pensilvânia da Pensilvânia demográfica

Em 2024, mais de 65 população da Pensilvânia atingiu 2.381.464, representando 18,5% da população total do estado. O condado de Dauphin, onde o MPB está sediado, tem 19,2% dos residentes com mais de 65 anos.

Faixa etária	Percentagem	Preferência de serviço bancário
65 anos ou mais	18.5%	Serviços tradicionais de ramificação
45-64 anos	26.3%	Serviços digitais/ramificados mistas
25-44 anos	22.7%	Bancário digital primeiro

Preferências bancárias digitais entre clientes mais jovens

Em 2024, 78% dos millennials e Gen Z na Pensilvânia usam plataformas bancárias móveis. Os volumes de transações digitais para MPB aumentaram 42% em comparação com 2023.

Métrica bancária digital	2024 Valor
Usuários bancários móveis	78%
Crescimento da transação digital	42%
Aberturas de contas on -line	35%

Necessidades bancárias comunitárias rurais

O MPB atende 12 municípios no centro da Pensilvânia, com 47 ramos concentrados em áreas rurais e suburbanas. Renda familiar média em regiões de serviço: US $ 62.340.

Métrica bancária rural	2024 dados
Condados servidos	12
Filiais totais	47
Renda familiar média rural	$62,340

Dinâmica da força de trabalho e recrutamento de talentos

A MPB empregou 536 funcionários em período integral em 2024, com uma posse média de 7,2 anos. Salário médio para profissionais bancários na Pensilvânia: US $ 68.500.

Métrica da força de trabalho	2024 Valor
Total de funcionários	536
Posse média dos funcionários	7,2 anos
Salário profissional médio bancário	$68,500

Mid Penn Bancorp, Inc. (MPB) - Análise de Pestle: Fatores tecnológicos

Investimentos da plataforma bancária digital

A Mid Penn Bancorp investiu US $ 2,3 milhões em infraestrutura bancária digital em 2023. O volume de transações da plataforma bancária digital aumentou 37,4% em comparação com o ano anterior. A base de usuários bancários on -line expandiu -se para 68.500 usuários ativos.

Métrica da plataforma digital	2023 dados
Investimento de infraestrutura digital	US $ 2,3 milhões
Crescimento de transações on -line	37.4%
Usuários bancários online ativos	68,500

Medidas de segurança cibernética

O investimento em segurança cibernética atingiu US $ 1,7 milhão em 2023. A implementação da autenticação de vários fatores reduziu potenciais violações de segurança em 42%. Conformidade com a estrutura de segurança cibernética do NIST com 98% de eficácia.

Métrica de segurança cibernética	2023 desempenho
Investimento de segurança cibernética	US $ 1,7 milhão
Redução de violação de segurança	42%
Conformidade da estrutura do NIST	98%

Desenvolvimento de aplicativos bancários móveis

Os downloads de aplicativos bancários móveis aumentaram 45% em 2023. As métricas de engajamento de usuários de aplicativos mostram 62% dos usuários acessando a plataforma semanalmente. O volume de transações móveis atingiu US $ 127,6 milhões.

Métrica bancária móvel	2023 dados
Crescimento de download de aplicativos	45%
Usuários ativos semanais	62%
Volume de transação móvel	US $ 127,6 milhões

Implementação de AI e aprendizado de máquina

O investimento em tecnologia da IA ​​totalizou US $ 1,4 milhão em 2023. Algoritmos de aprendizado de máquina melhoraram a precisão da avaliação de risco em empréstimos em 33%. O processamento automatizado reduziu os custos operacionais em 22%.

Métrica ai/ml	2023 desempenho
Investimento em tecnologia da IA	US $ 1,4 milhão
Precisão da avaliação de risco de empréstimo	Melhoria de 33%
Redução de custos operacionais	22%

Mid Penn Bancorp, Inc. (MPB) - Análise de Pestle: Fatores Legais

Conformidade com regulamentos bancários como Dodd-Frank Act

O Mid Penn Bancorp mantém a conformidade com a Lei de Reforma e Proteção ao Consumidor de Dodd-Frank Wall Street de 2010. A partir de 2024, o banco aloca US $ 1,2 milhão anualmente aos esforços de conformidade regulatória.

Métrica de conformidade regulatória	2024 dados
Orçamento anual de conformidade	$1,200,000
Funcionários da equipe de conformidade	18 funcionários em tempo integral
Frequência de auditoria regulatória	Trimestral

Leis de proteção ao consumidor que regem os serviços financeiros e de empréstimos

Regulamentos do Departamento de Proteção Financeira do Consumidor (CFPB) são rigorosamente seguidos por Mid Penn Bancorp.

Métrica de proteção ao consumidor	2024 dados de conformidade
Instâncias de violação de empréstimos justos	0
Taxa de resolução de reclamação do consumidor	99.7%
Taxa de precisão de divulgação de empréstimo	100%

Lavagem anti-dinheiro (AML) e Conheça os requisitos do seu cliente (KYC)

Mid Penn Bancorp implementa protocolos abrangentes de LBC e KYC.

• Investimento total de conformidade com LBC em 2024: $ 875.000
• Sistemas avançados de monitoramento de transações implantadas
• Horário de conclusão do processo de verificação do cliente: 24-48 horas

Métrica AML/KYC	2024 Estatísticas
Relatórios de atividades suspeitas arquivadas	42
Taxa de conclusão da verificação de antecedentes do cliente	100%
Horário de treinamento da LBC por funcionário	16 horas por ano

Riscos legais potenciais de mudanças regulatórias no setor bancário

Estratégia de gerenciamento de riscos legais Envolve o monitoramento contínuo de possíveis mudanças regulatórias.

Métrica de gerenciamento de risco legal	2024 dados
Orçamento do Departamento Jurídico	$2,500,000
Retentor de consultor jurídico externo	US $ 450.000 anualmente
Recursos de rastreamento de mudanças regulatórias	3 Profissionais Jurídicos dedicados

Mid Penn Bancorp, Inc. (MPB) - Análise de Pestle: Fatores Ambientais

Iniciativas de financiamento verde para desenvolvimento de negócios local sustentável

A Mid Penn Bancorp comprometeu US $ 12,3 milhões em empréstimos de financiamento verde em 2023, visando desenvolvimentos de negócios sustentáveis ​​locais. A carteira de empréstimos verdes do banco aumentou 17,4% em comparação com o ano anterior.

Categoria de empréstimo verde	Investimento total ($)	Número de projetos
Energia renovável	4,750,000	22
Negócios com eficiência energética	3,890,000	35
Agricultura sustentável	3,660,000	18

Avaliação de risco climático para carteiras de empréstimos agrícolas e comerciais

A Mid Penn Bancorp implementou uma estrutura abrangente de avaliação de risco climática, cobrindo 87,6% de suas carteiras de empréstimos agrícolas e comerciais. O banco identificou possíveis riscos financeiros relacionados ao clima, totalizando US $ 42,5 milhões em seus segmentos de empréstimos.

Categoria de risco	Impacto financeiro potencial ($)	Estratégia de mitigação
Risco de inundação	18,300,000	Requisitos de seguro aprimorados
Impacto da seca	14,200,000	Reestruturação flexível de empréstimos
Eventos climáticos extremos	10,000,000	Critérios de empréstimo ajustados ao risco

Investimentos de eficiência energética em infraestrutura bancária

O banco investiu US $ 1,75 milhão em atualizações de eficiência energética em seus 43 filiais. Esses investimentos resultaram em uma redução de 22,3% no consumo total de energia e na economia anual de US $ 385.000.

Atualização de infraestrutura	Investimento ($)	Economia de energia (%)
Iluminação LED	450,000	12.6
Modernização de HVAC	850,000	8.4
Instalação do painel solar	450,000	1.3

Práticas bancárias sustentáveis ​​para atender aos padrões ambientais em evolução

A Mid Penn Bancorp alinhou 94,2% de suas operações com os atuais padrões regulatórios ambientais. O banco reduziu sua pegada de carbono em 26,7% por meio de iniciativas direcionadas de sustentabilidade.

Métrica de sustentabilidade	2023 desempenho	Mudança de ano a ano
Redução de emissões de carbono	26.7%	+8.3%
Conformidade regulatória	94.2%	+5.6%
Ofertas sustentáveis ​​de produtos	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.