Mid Penn Bancorp Reports Strong Second-Quarter 2026 Earnings, Raises Dividend and Continues Strategic Growth
Mid Penn Bancorp, Inc. (NASDAQ: MPB), the parent company of Mid Penn Bank and MPB Financial Services, LLC, reported a significant increase in earnings for the second quarter of 2026, driven by strong net interest income, substantial loan growth, improved operating efficiency and continued contributions from recent acquisitions.
For the quarter ended June 30, 2026, Mid Penn Bancorp reported net income available to common shareholders of $21.7 million, or $0.86 per basic common share and $0.85 per diluted common share. The results represent a substantial improvement from net income of $4.8 million, or $0.22 per basic and diluted common share, during the second quarter of 2025.
The company’s diluted earnings per share also exceeded the consensus analyst estimate of $0.79 for the second quarter of 2026, highlighting stronger-than-expected quarterly performance.
Mid Penn’s second-quarter results benefited from the acquisitions of William Penn and 1st Colonial. The year-over-year comparison reflects the impact of these transactions, while the sequential improvement from the first quarter of 2026 was helped by a full quarter of results from the 1st Colonial acquisition.
The company also announced an increase in its quarterly cash dividend. The Board of Directors declared a dividend of $0.23 per common share, representing a 4.55% increase from the previous quarterly dividend of $0.22 per share.
The dividend is scheduled to be paid on August 14, 2026, to shareholders of record as of August 3, 2026.
Earnings Increase Sharply
Net income available to common shareholders increased $16.9 million, or 355.5%, compared with the second quarter of 2025. On a linked-quarter basis, earnings increased $13.0 million, or 149.2%, compared with the first quarter of 2026.
The sharp improvement in earnings reflected the contribution of recent acquisitions, stronger net interest income and improved operating leverage.
Chair, President and Chief Executive Officer Rory G. Ritrievi said the company was pleased with the second-quarter performance, citing earnings above consensus expectations, meaningful organic loan growth and strong net interest margin expansion.
Management also highlighted the improvement in the efficiency ratio to below 60%, stable asset quality and increases in both book value and tangible book value per share.
According to Ritrievi, comparisons with the second quarter of 2025 and the first quarter of 2026 are affected by merger and acquisition-related costs and significant balance-sheet expansion. However, when measured against analyst and internal expectations, management said the second-quarter results were favorable across nearly every major performance metric.
Net Interest Margin Expands to 4.06%
One of the most important developments during the quarter was the continued expansion of Mid Penn’s net interest margin.
The tax-equivalent net interest margin reached 4.06% during the second quarter of 2026, compared with 3.80% during the first quarter and 3.44% during the second quarter of 2025.
The improvement represented an increase of 26 basis points on a linked-quarter basis and 62 basis points compared with the same period a year earlier.
The year-over-year increase was driven by higher yields on investment securities, improved loan yields and lower funding costs.
Net interest income totaled $65.3 million during the second quarter, compared with $55.3 million in the first quarter of 2026 and $48.2 million in the second quarter of 2025.
Interest income during the quarter included $4.3 million in loan accretion income related to fair value marks on acquired loans. These marks are accreted into interest income over the expected life of the acquired assets.
The yield on interest-earning assets increased to 5.99% during the second quarter, compared with 5.75% in the first quarter and 5.69% in the second quarter of 2025.
For the first six months of 2026, net interest income increased 32.9% to $120.5 million, compared with $90.7 million during the same period in 2025.
The increase was primarily driven by a $26.4 million increase in interest income on loans and a $5.0 million increase in interest income on investment securities.
Loan Growth Remains Strong
Mid Penn continued to expand its loan portfolio during the second quarter.
Loan balances increased $107.2 million, or 7.8% on an annualized basis, compared with the first quarter of 2026.
Total loans reached approximately $5.6 billion at June 30, 2026, an increase of $784.3 million, or 16.2%, compared with $4.8 billion at June 30, 2025.
The acquisition of 1st Colonial contributed $597.5 million in acquired loans. Excluding those acquired balances, organic loan growth totaled $186.8 million from June 30, 2025.
The continued organic growth demonstrates ongoing demand for lending products across Mid Penn’s markets. The company remains focused on expanding its commercial, consumer and other lending relationships while maintaining disciplined credit standards.
Average loans increased $504.9 million during the second quarter to $5.6 billion, compared with $5.1 billion in the first quarter. Average loans also increased $863.5 million from the second quarter of 2025.
The growth in the loan portfolio contributed to the expansion of net interest income and helped support the company’s improved margin performance.
Deposits and Funding Costs Improve
Total deposits increased $503.6 million, or 9.2%, from June 30, 2025, reaching approximately $6.0 billion.
However, deposits declined $17.7 million, or 1.2% on an annualized basis, during the second quarter compared with the first quarter.
The year-over-year increase was largely influenced by the 1st Colonial and William Penn acquisitions. Excluding $747.1 million in deposits acquired through the 1st Colonial transaction, organic deposits declined $243.4 million, or 17.9% on an annualized basis.
The decline primarily reflected the planned reduction of approximately $225 million in brokered certificates of deposit during 2025.
Average deposits were $5.9 billion during the second quarter, an increase of $545.9 million, or 10.1%, compared with the first quarter and $779.7 million, or 15.1%, compared with the second quarter of 2025.
The average cost of deposits declined to 2.07%, down 2 basis points from the first quarter and 34 basis points from the second quarter of 2025.
The overall cost of funds declined to 2.09% from 2.12% in the first quarter. The improvement was primarily attributed to the repricing of higher-cost time deposits and a favorable shift in the funding mix.
Noninterest-bearing deposits increased by $82.8 million, providing additional support to the company’s funding profile.
Efficiency Ratio Falls Below 60%
Mid Penn continued to improve its operating efficiency during the quarter.
The core efficiency ratio improved to 59.82% during the second quarter, compared with 63.52% during the first quarter and 62.56% during the second quarter of 2025.
The improvement was driven by stronger net interest income and disciplined management of core noninterest expenses.
The company benefited from the revenue contribution of its larger balance sheet while continuing to identify opportunities to achieve cost synergies from its recent acquisitions.
Management said it continues to evaluate additional opportunities to improve efficiency as the integration process progresses.
Noninterest Income Increases
Noninterest income totaled $10.6 million during the second quarter, an increase of $1.0 million, or 10.2%, from the first quarter.
The increase was primarily driven by an $805,000 increase in mortgage banking income, a $336,000 increase in earnings from the cash surrender value of life insurance and a $230,000 increase in fiduciary and wealth management income.
These gains were partially offset by a $415,000 decrease in other noninterest income.
For the first six months of 2026, noninterest income totaled $20.2 million, an increase of $8.8 million, or 77.4%, compared with the same period of 2025.
The significant increase was driven largely by a $5.0 million increase in fiduciary and wealth management income, reflecting the acquisition of Cumberland Advisors.
The company also benefited from a $981,000 increase in earnings from the cash surrender value of life insurance and a $2.0 million increase in other noninterest income.
The growth in noninterest income highlights the increasing contribution of Mid Penn’s diversified financial services businesses.
Expenses Decline Sequentially
Noninterest expense totaled $47.8 million during the second quarter, down $4.2 million, or 8.1%, from $52.0 million in the first quarter.
The decline was primarily driven by a $7.6 million decrease in merger and acquisition-related expenses. This reduction was partially offset by a $3.6 million increase in salaries and employee benefits associated with the 1st Colonial acquisition.
For the first six months of 2026, noninterest expense totaled $99.7 million, up 27.1% from $78.4 million during the same period of 2025.
The increase reflected the larger size and operational complexity of the company following several acquisitions.
Salaries and benefits increased $13.2 million, reflecting additional personnel from the 1st Colonial, Cumberland Advisors and William Penn transactions.
Software licensing and utilization costs increased $1.9 million, while occupancy expenses rose $1.5 million and legal and professional fees increased $2.0 million.
Intangible amortization also increased $1.9 million.
These increases were partially offset by a $3.5 million decline in merger and acquisition expenses compared with the first six months of 2025.
Credit Quality Remains Stable
Mid Penn reported stable credit performance during the second quarter.
The total provision for credit losses, including credit exposures recorded off the balance sheet, was $528,000 during the quarter. This compared with a $1.6 million provision during the first quarter and a $2.3 million provision during the second quarter of 2025.
The quarter-over-quarter change was primarily driven by qualitative adjustments to the owner-occupied commercial real estate portfolio and improved macroeconomic assumptions.
These factors were partially offset by an increased reserve for one individually analyzed commercial and industrial loan.
Net charge-offs totaled only $22,000 during the second quarter, representing approximately 0.0004% of total average loans.
The allowance for credit losses on loans was 0.74% of loans at June 30, 2026, compared with 0.75% at March 31 and 0.78% at June 30, 2025.
Total nonperforming assets were $36.8 million at June 30, down from $38.1 million at the end of the first quarter. The decline was primarily driven by the payoff of a $1.3 million commercial real estate loan.
Loans past due 30 days or more represented 0.71% of total loans at June 30, compared with 0.70% at the end of the first quarter and 0.58% a year earlier.
Capital Strength Supports Shareholder Returns
Shareholders’ equity increased $14.5 million, or 1.6%, to $901.9 million at June 30, 2026.
Retained earnings increased $16.1 million, or 7.2%, during the quarter to $238.2 million.
Mid Penn and Mid Penn Bank maintained regulatory capital levels above the minimum requirements for the Bank to be considered well capitalized.
The company also continued to return capital to shareholders through both dividends and share repurchases.
During the second quarter, Mid Penn repurchased 76,000 shares of common stock, returning approximately $2.5 million to shareholders.
The company’s Board of Directors previously authorized an increase to the treasury stock repurchase program, raising the total authorized repurchase amount to $50 million through April 30, 2027.
As of June 30, Mid Penn had repurchased a total of 595,891 shares under the program at an average price of $24.82 per share.
Dividend Increased 4.55%
The Board declared a quarterly cash dividend of $0.23 per common share, representing a 4.55% increase from the previous quarterly dividend of $0.22.
The dividend will be paid on August 14, 2026, to shareholders of record as of August 3.
The increase reflects management’s confidence in the company’s earnings outlook, capital position and ability to continue generating cash flow.
Mid Penn Bancorp enters the remainder of 2026 with strong momentum across its core business.
The company delivered significant year-over-year earnings growth, expanded its net interest margin, achieved meaningful organic loan growth and reduced its core efficiency ratio below 60%.
Recent acquisitions continue to contribute to the company’s expanded scale, while management remains focused on capturing additional cost synergies and improving operating performance.
The company’s stable asset quality and strong capital position provide a solid foundation for continued growth. At the same time, Mid Penn is maintaining a balanced approach to capital allocation through dividends and share repurchases.
With loan growth remaining healthy, funding costs improving and diversified noninterest income increasing, management believes the company is well positioned to build on its second-quarter performance.
As Mid Penn continues integrating its recent acquisitions and pursuing organic growth opportunities, the company will remain focused on strengthening customer relationships, improving operating efficiency and delivering long-term value to shareholders.
The second-quarter results demonstrate the progress made by Mid Penn Bancorp as it expands its banking franchise and leverages its acquisitions to create a larger, more diversified financial services organization. With strong earnings momentum and continued strategic execution, the company expects to carry that momentum through the remainder of 2026.
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