SEC Form 424B5 filed by Mid Penn Bancorp

Filed Pursuant to Rule 424(b)(5)
Registration Statement Number 333-274177

 

The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying base prospectus are not an offer to sell these securities and are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject To Completion, Dated November 1, 2024

PRELIMINARY PROSPECTUS SUPPLEMENT

(To Prospectus Dated August 23, 2023)

$70,000,000

 

 

Common Stock

 

 

We are offering      shares of our common stock, par value $1.00 per share. Our common stock is traded on The NASDAQ Global Market under the symbol “MPB.” On October 31, 2024, the last reported sale price of our common stock on The NASDAQ Global Market was $31.59 per share.

 

 

Investing in our common stock involves a high degree of risk. You should carefully read and consider the risk factors described in this prospectus supplement, the accompanying base prospectus, our periodic reports and other information we file with the Securities and Exchange Commission before making a decision to purchase our common stock. See “Risk Factors” beginning on page S-5 of this prospectus supplement.    

 

		Per Share				Total
Public offering price		$				$
Underwriting discount		$				$
Proceeds to us, before expenses		$				$

The shares of our common stock are being offered through the underwriters on a firm commitment basis. We have granted the underwriters a 30 day option to purchase up to an additional      shares of our common stock at the public offering price, less the underwriting discount.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement or the accompanying base prospectus. Any representation to the contrary is a criminal offense.

These securities are not savings accounts, deposits or other obligations of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

The underwriters expect to deliver the shares of common stock, in book-entry form only, through the facilities of The Depository Trust Company on or about November  , 2024, subject to customary closing conditions.

 

 

 

STEPHENS INC.		PIPER SANDLER

The date of this prospectus supplement is      , 2024

TABLE OF CONTENTS

 

		Page
Prospectus Supplement
ABOUT THIS PROSPECTUS SUPPLEMENT			S-ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			S-iii
PROSPECTUS SUPPLEMENT SUMMARY			S-1
THE OFFERING			S-4
RISK FACTORS			S-5
USE OF PROCEEDS			S-12
CAPITALIZATION			S-13
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA			S-15
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO NON-U.S. HOLDERS			S-34
DESCRIPTION OF OUR COMMON STOCK			S-39
UNDERWRITING			S-42
LEGAL MATTERS			S-46
EXPERTS			S-46
WHERE YOU CAN FIND MORE INFORMATION			S-46
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE			S-47

Prospectus

 

ABOUT THIS PROSPECTUS			1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			2
THE COMPANY			4
RISK FACTORS			5
USE OF PROCEEDS			6
SECURITIES WE MAY OFFER			7
DESCRIPTION OF COMMON STOCK			8
DESCRIPTION OF PREFERRED STOCK			11
DESCRIPTION OF DEPOSITARY SHARES			13
DESCRIPTION OF DEBT SECURITIES			16
DESCRIPTION OF WARRANTS			32
DESCRIPTION OF UNITS			33
PLAN OF DISTRIBUTION			34
LEGAL MATTERS			36
EXPERTS			36
WHERE YOU CAN FIND MORE INFORMATION			36
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE			37

You should rely only on the information contained in, or incorporated by reference into, this prospectus supplement, the accompanying base prospectus and any “free writing prospectus” filed by us with the Securities and Exchange Commission, or SEC. We have not, and the underwriters have not, authorized any other person to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are not making an offer of these securities in any jurisdiction where the offer is not permitted.

You should assume that the information appearing in, or incorporated by reference in, this prospectus supplement, the accompanying base prospectus and any “free writing prospectus” is accurate only as of their respective dates, regardless of the time of delivery of those respective documents or sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since those dates.

 

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ABOUT THIS PROSPECTUS SUPPLEMENT

This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and certain other matters and also adds to and updates information contained in the accompanying base prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying base prospectus. The second part, the accompanying base prospectus, gives more general information about us and the common stock offered by the prospectus supplement and the accompanying base prospectus. Some of the information in the accompanying base prospectus may not apply to this offering. Generally, when we refer to the prospectus, we are referring to this prospectus supplement and the base prospectus combined as one document. To the extent the information in the prospectus supplement differs from the information in the accompanying base prospectus or any document incorporated by reference filed prior to the date of this prospectus supplement, you should rely on the information in this prospectus supplement.

We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The distribution of this prospectus and the offering of the common stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the common stock and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any common stock offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

The information contained or incorporated by reference in this prospectus supplement and the accompanying base prospectus is not investment, legal or tax advice. You should consult your own legal counsel, accountants and other advisors for legal, tax, business, financial and related advice before investing in our common stock.

It is important for you to read and consider all of the information contained in this prospectus supplement, the accompanying base prospectus and any “free writing prospectus,” including the documents incorporated by reference herein and therein, in making your investment decision. For additional information, please refer to “Where You Can Find More Information” and “Incorporation of Certain Documents By Reference.”

Unless this prospectus supplement indicates otherwise or the context otherwise requires, references to “we,” “us,” “our,” “Mid Penn Bancorp, Inc.” “Mid Penn” or the “Company” refer to Mid Penn Bancorp, Inc. and its direct or indirect owned subsidiaries on a combined basis. References to the “Bank” refer to Mid Penn Bank, our banking subsidiary. The term “you” refers to a prospective investor. Unless otherwise expressly stated or the context otherwise requires, all information in this prospectus supplement assumes that the option to purchase additional shares granted to the underwriters is not exercised in whole or in part.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus supplement and the accompanying base prospectus contain or incorporate by reference forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, or Exchange Act. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections and statements of our beliefs concerning future events, business plans, objectives, expected operating results, including after giving effect to the Merger (as defined below) with William Penn (as defined below) and the offering contemplated by this prospectus supplement, and the assumptions upon which those statements are based. Forward looking statements include without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” or words or phrases of similar meaning. These forward-looking statements include the proposed offering of the Company’s common stock contemplated by this prospectus supplement and expectations relating to the anticipated opportunities and financial and other benefits of the Merger, and the projections of, or guidance on, the Company’s or the combined company’s future financial performance, asset quality, liquidity, capital levels, expected levels of future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated trends in the Company’s business or financial results. We caution that the forward-looking statements are based largely on our expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. Actual results, performance or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements.

The following factors, among others, could cause our financial performance to differ materially from that expressed in such forward-looking statements:

 

•

the Company’s ability to efficiently integrate acquisitions, including as a result of the Merger, into its business and operations, which may take longer than anticipated, may be more costly than anticipated and may have unanticipated adverse results relating to the Company’s existing business and operations;

 

•

the possibility that the anticipated benefits of the Merger, including anticipated cost savings and other synergies of the Merger may take longer to be realized or may not be achieved in their entirety, and attrition in key client, partner and other relationships relating to the Merger may be greater than expected;

 

•

the effects of future economic conditions on Mid Penn, the Bank, our nonbank subsidiaries, and our markets and customers;

 

•

governmental monetary and fiscal policies, as well as legislative and regulatory changes;

 

•

future actions or inactions of the United States government, including a failure to increase the government debt limit or a prolonged shutdown of the federal government;

 

•

business or economic disruption from national or global epidemic or pandemic events;

 

•

the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, the value of investment securities, and interest rate protection agreements;

 

•

the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet;

 

•

an increase in the Pennsylvania Bank Shares Tax to which the Bank’s capital stock is currently subject, or imposition of any additional taxes on the capital stock of Mid Penn or the Bank;

 

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•

impacts of the capital and liquidity requirements imposed by bank regulatory agencies;

 

•

the effect of changes in accounting policies and practices, as may be adopted by regulatory agencies, as well as the Public Company Accounting Oversight Board, Financial Accounting Standards Board, the SEC, and other accounting and reporting rule making authorities;

 

•

the costs and effects of litigation and of unexpected or adverse outcomes in such litigation, including litigation related to the Merger;

 

•

changes in technology;

 

•

our ability to implement business strategies, including our acquisition strategy;

 

•

our ability to successfully expand our franchise, including through acquisitions or establishing new offices at favorable prices;

 

•

our ability to successfully integrate any banks, companies, offices, assets, liabilities, customers, systems and management personnel we acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames;

 

•

potential goodwill impairment charges, or future impairment charges and fluctuations in the fair values of reporting units or of assets in the event projected financial results are not achieved within expected time frames;

 

•

our ability to attract and retain qualified management and personnel;

 

•

results of regulatory examination and supervision processes;

 

•

the ability to obtain regulatory approvals and satisfy other closing conditions to the Merger, including approval by the shareholders of Mid Penn and William Penn;

 

•

the possibility of increased scrutiny by, and/or additional regulatory requirements of, governmental authorities as a result of the Merger;

 

•

potential exposure to unknown or contingent risks and liabilities we have acquired, or may acquire, or target for acquisition, including in connection with the Merger;

 

•

the failure of assumptions underlying the establishment of reserves for loan and lease losses, the assessment of potential impairment of investment securities, and estimations of values of collateral and various financial assets and liabilities;

 

•

our ability to maintain compliance with the listing rules of The NASDAQ Stock Market;

 

•

our ability to maintain the value and image of our brand and protect our intellectual property rights;

 

•

volatility in the securities markets;

 

•

disruptions due to flooding, severe weather, or other natural disasters or acts of God;

 

•

acts of war, terrorism, or global military conflict;

 

•

supply chain disruption;

 

•

the risk factors described in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings with the SEC; and

 

•

other risks and uncertainties contained in this prospectus supplement or incorporated by reference into this prospectus supplement from the other reports and filings with the SEC.

If one or more of the factors affecting our forward-looking information and statements proves incorrect, then our actual results, performance or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this prospectus supplement and in the information

 

S-iv

incorporated by reference herein. Therefore, we caution you not to place undue reliance on our forward-looking information and statements. Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our periodic and current reports that we file with the SEC. Also note that we provide a cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our businesses in our periodic and current reports to the SEC incorporated by reference in this prospectus supplement, the accompanying base prospectus and other offering materials. These are factors that, individually or in the aggregate, management believes could cause our actual results to differ materially from expected and historical results.

 

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S-1

 

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, in addition to the information included or incorporated by reference in this prospectus supplement and the accompanying base prospectus, before making an investment decision to purchase shares of our common stock in this offering. The risks and uncertainties described below and those incorporated by reference into this prospectus supplement and the accompanying base prospectus are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business. If any of the risks actually occur, our business, financial condition, liquidity, results of operations and prospects could be materially adversely affected. In that case, the market price of our common stock could decline substantially and you could lose all or a part of your investment.

Risks Related to Our Common Stock and this Offering

We will have broad discretion as to the use of proceeds from this offering; this offering is not conditioned upon the closing of, and we are not required to use the net proceeds therefrom towards costs associated with, the Merger, and our use of those proceeds may not yield a favorable return on your investment.

This offering is not conditioned upon the closing of, and we are not required to use the net proceeds towards the costs associated with, the Merger. Under these circumstances, our board of directors and management will have broad discretion to use the proceeds of this offering in our business for general corporate purposes.

We intend to use the net proceeds generated by this offering to support our continued growth, including investments in the Bank to support organic growth, potential redemption of subordinated debt, future strategic transactions and for other general corporate purposes. We have not, however, identified specific amounts of proceeds for any of these purposes and we will have significant flexibility in determining the amount of net proceeds we apply to different uses and the timing of these applications. Our shareholders may not agree with the manner in which our management chooses to allocate and invest the net proceeds. Our failure to utilize these funds effectively could reduce our profitability. We have not established a timetable for the effective deployment of the proceeds on a long-term basis, and we cannot predict how long we will need to deploy the proceeds effectively. Investing the offering proceeds in securities until we are able to deploy the proceeds will provide lower margins than we generally earn on loans, potentially adversely affecting stockholder returns, including earnings per share, return on assets and return on equity.

The market price of our common stock may fluctuate significantly, and this may make it difficult for investors to resell shares of common stock owned by them at times or at prices they find attractive.

The market price of our common stock as reported on The NASDAQ Global Market is subject to constant change during business trading hours. We expect that the market price of our common stock will continue to fluctuate and there can be no assurance about the stability or trend of market prices for our common stock. Our stock price may fluctuate significantly as a result of a variety of factors, including the Merger, many of which are beyond our control. These factors include those described elsewhere in this entire “Risk Factors” section, in this prospectus, and our other filings with the SEC. Stock price volatility, particularly with a stock like ours with lower trading volumes than larger financial services companies, may make it difficult for investors to resell their Mid Penn common stock when they want and at times or prices that they find attractive.

General market fluctuations, industry factors and general economic and political conditions and events, such as economic slowdowns or recessions, interest rate changes or credit loss trends, could also cause our stock price to decrease regardless of operating results. Stock price volatility may make it more difficult for you to resell your common stock when you want and at prices you find attractive. Moreover, in the past, securities class action lawsuits have been instituted against some companies following periods of volatility in the market price of securities. We could in the future be the target of similar litigation. Securities litigation could result in substantial costs and divert management’s attention and resources from our normal business.

 

S-5

The trading volume in our common stock is less than that of other larger financial services companies.

Our common stock is listed for trading on The NASDAQ Global Market; however, the trading volume in our common stock is less than that of other larger financial services companies. A public trading market having the desired characteristics of depth, liquidity and orderliness depends on the presence in the marketplace of willing buyers and sellers of our common stock at any given time. This presence depends on the individual decisions of investors and general economic and market conditions over which we have no control. Given the generally lower trading volume of our common stock, significant sales of our common stock, or the expectation of these sales, could cause our stock price to fall.

We may need to, or be required to, raise additional capital in the future, and capital may not be available when needed and on terms favorable to current stockholders.

Federal banking regulators require the Company and the Bank to maintain adequate levels of capital to support their operations. These capital levels are determined and dictated by law, regulation, and banking regulatory agencies. In addition, capital levels are also determined by our management and board of directors, based on capital levels that they believe are necessary to support our business operations.

To the extent we raise additional capital by issuing additional shares of our common stock or other securities convertible into, or exchangeable for, our common stock, it would likely dilute the ownership interests of current investors and could dilute the per share book value and earnings per share of our common stock. Furthermore, a capital raise through issuance of additional shares may have an adverse impact on our stock price. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights, preferences and privileges senior to our current common stockholders, which may adversely impact our current common stockholders. Holders of our common stock are not entitled to preemptive rights or other protections against dilution.

As discussed elsewhere in this prospectus supplement, in connection with the closing of the Merger, each share of William Penn common stock issued and outstanding will be converted into the right to receive 0.426 shares of Mid Penn common stock. Mid Penn will also assume all outstanding options to acquire William Penn shares pursuant to their terms. As of September 30, 2024, William Penn had approximately 9,218,459 shares of common stock and 1,264,000 options outstanding. The issuance of our common stock in connection with the closing of the Merger and the issuance of our common stock upon the exercise of options assumed in the Merger will dilute your percentage ownership of Mid Penn.

Our ability to raise additional capital will depend on conditions in the capital markets at that time, which are outside of our control, and on our financial performance. Accordingly, we cannot be certain of our ability to raise additional capital on acceptable terms and acceptable time frames or to raise additional capital at all. If we cannot raise additional capital in sufficient amounts when needed, our ability to comply with regulatory capital requirements could be materially impaired. In addition, if capital is not available when we need it on favorable terms or at all, we may have to issue common stock or other securities on less desirable terms or reduce our rate of growth until market conditions become more favorable. Any such events could have a material adverse effect on our business, financial condition and results of operations.

Offerings of debt, which would be senior to our common stock upon liquidation, and/or preferred equity securities which may be senior to our common stock for purposes of dividend distributions or upon liquidation, may adversely affect the market price of our common stock.

We may attempt to increase our capital resources if the Company’s or the Bank’s capital ratios fall below the required minimums. The Company or the Bank could be required to raise additional capital by making additional offerings of debt or preferred equity securities, including medium-term notes, senior or subordinated

 

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notes and preferred stock. If a future liquidation of Mid Penn occurs, holders of debt securities and shares of preferred stock and lenders with respect to other borrowings are likely to receive distributions of available assets prior to the holders of our common stock.

Also, our board of directors is authorized to issue one or more classes or series of preferred stock from time to time without any action on the part of the shareholders. The board of directors also has the power, without shareholder approval, to set the terms of any such classes or series of preferred stock that may be issued, including voting rights, dividend rights, and preferences over common stock with respect to dividends or upon our dissolution, winding up and liquidation and other terms. If we issue preferred stock in the future that has a preference over our common stock with respect to the payment of dividends or upon our liquidation, dissolution or winding up, or if preferred stock is issued with voting rights that dilute the voting power of our common stock, the rights of holders of our common stock or the market price of our common stock could be adversely affected.

Our common stock is equity and is therefore subordinate to our existing subordinated debt and future indebtedness and any preferred stock we may issue in the future.

Shares of common stock are equity interests and do not constitute indebtedness. As such, shares of our common stock will rank junior to all of our indebtedness, including our outstanding subordinated notes, which had an aggregate outstanding principal amount of $45.89 million on September 30, 2024, and to other non-equity claims against us and our assets available to satisfy claims against us, including in our liquidation. Additionally, holders of our common stock are subject to the prior dividend and liquidation rights of holders of any outstanding preferred stock. While we have no preferred stock currently outstanding, our board of directors is authorized to issue classes or series of preferred stock without any action on the part of the holders of our common stock, and we are permitted to incur additional debt. Upon liquidation, lenders and holders of our debt securities and preferred stock would receive distributions of our available assets prior to holders of our common stock.

Our ability to pay dividends on our common stock, and principal and interest on our subordinated notes, depends primarily on dividends from our banking subsidiary, which is subject to regulatory limits.

Mid Penn is a bank holding company and its operations are conducted primarily by its banking subsidiary. Our ability to pay dividends on our common stock, and principal and interest on our subordinated notes, depends on our receipt of dividends from the Bank. Dividend payments from the Bank are subject to legal and regulatory limitations, generally based on net profits and retained earnings, imposed by the respective regulatory agencies that supervise the Bank. The ability of the Bank to pay dividends is also subject to profitability, financial condition, liquidity, and capital management limits. There is no assurance that the Bank or other subsidiaries will be able to pay dividends, or that Mid Penn itself will generate adequate cash flow to pay dividends in the future. Our ability to pay dividends on our common stock, or the amount of any dividends paid, could have a material adverse effect on the market price of our common stock.

Our common stock is not insured by any governmental entity.

Although Mid Penn and the Bank are regulated by governmental agencies, our common stock is not a deposit account or other obligation of the Bank or any other bank and, therefore, is not insured against loss by the FDIC, any other deposit insurance fund, any other governmental entity or by any other public or private entity. Investment in our common stock is inherently risky for the reasons described elsewhere in this “Risk Factors” section, in this prospectus, and our other filings with the SEC. Our common stock is also subject to the same market forces that affect the price of common stock in any other publicly traded company. As a result, investors who acquire our common stock may lose some or all of their investment.

Pennsylvania Business Corporation Law and various anti-takeover provisions under our articles of incorporation and bylaws could impede the takeover of Mid Penn.

Various Pennsylvania laws affecting business corporations may have the effect of discouraging offers to acquire Mid Penn, even if the acquisition would be advantageous to shareholders. In addition, we have various

 

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anti-takeover measures in place under our articles of incorporation and bylaws, including a supermajority vote requirement for mergers, the staggered election of our board of directors, and the absence of cumulative voting. Any one or more of these laws or measures may impede the takeover of Mid Penn and may prevent our shareholders from taking part in a transaction in which they could realize a premium over the current market price of our common stock.

Risks Related to the Merger

Failure to complete the Merger could negatively affect our market price, future business and financial results.

Although we anticipate closing the Merger in the second quarter of 2025, we cannot guarantee when, or whether, the Merger will be completed. If the Merger is not completed for any reason, we will be subject to a number of material risks, including the following:

 

•

Costs related to the Merger, such as legal, accounting and financial advisory fees, and, in specific circumstances, additional reimbursement and termination fees, must be paid even if the Merger is not completed.

 

•

Declines in our market price to the extent that the current market price of our common stock already reflects a market assumption that the Merger will be completed.

 

•

The diversion of management’s attention from the day-to-day business operations and the potential disruption to each company’s employees and business relationships during the period before the completion of the Merger may make it difficult to regain financial and market positions if the Merger does not occur.

 

•

Becoming subject to litigation related to any failure to complete the Merger.

Regulatory waivers and approvals may not be received or may be received and subsequently expire, be revoked or be amended to impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated in the Merger Agreement, including the Merger, may be completed, various waivers, approvals or consents must be obtained from various bank regulatory and other authorities, including the Board of Governors of the Federal Reserve System, the FDIC, and the Pennsylvania Department of Banking and Securities. In determining whether to grant these approvals, regulatory authorities consider a variety of factors, including the regulatory standing of each party. These approvals could be delayed or not obtained at all, including due to any or all of the following: an adverse development in any party’s regulatory standing or any other factors considered by regulators in granting such approvals; governmental, political, or community group inquiries, investigations or opposition; or changes in legislation or the political or regulatory environment generally, including as a result of changes of the U.S. executive administration, or Congressional leadership and regulatory agency leadership.

Even if the approvals are granted, they may impose terms and conditions, limitations, obligations or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations, or restrictions or that such conditions, limitations, obligations, or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the Merger or otherwise reduce the anticipated benefits of the Merger if the Merger were completed successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, limitations, obligations, or restrictions will not result in the delay or abandonment of the Merger. The completion of the Merger is conditioned on the receipt of the requisite regulatory approvals without the imposition of any materially burdensome regulatory condition and the expiration of all statutory waiting periods. Additionally, the completion of the Merger is conditioned on the absence of certain orders, injunctions, or

 

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decrees issued by any court or any governmental entity of competent jurisdiction that would prevent, prohibit, or make illegal the completion of the Merger or any of the other transactions contemplated by the Merger Agreement.

Despite the parties’ expected commitment to use their reasonable best efforts to respond to any request for information and resolve any objection that may be asserted by any governmental entity with respect to the Merger Agreement, neither party is required under the terms of the Merger Agreement to take any action, commit to take any action, or agree to any condition or restriction in connection with obtaining these approvals, that would reasonably be expected to have a material adverse effect on the combined company and its subsidiaries, taken as a whole, after giving effect to the proposed Merger.

Further, such approvals are subject to expiration if the transaction is not consummated within the time period provided in the approval.

Combining Mid Penn and William Penn may be more difficult, costly or time consuming than expected, and we may fail to realize the anticipated benefits of the Merger.

The success of the Merger will depend on, among other things, our ability to integrate William Penn into our business in a manner that facilitates growth opportunities and achieves the anticipated benefits of the Merger, including those described under “Summary—Recent Developments—William Penn Transaction.” If we are not able to successfully achieve these objectives, the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected. In addition, the actual cost and savings and anticipated benefits of the Merger could be less than anticipated, and integration may result in additional unforeseen expenses.

Litigation relating to the Merger could require us to incur significant costs and suffer management distraction, as well as delay and/or enjoin the Merger.

Neither William Penn nor Mid Penn is currently able to predict the outcome of any suit arising out of or relating to the proposed transaction that may be filed in the future. If any letters or complaints are filed, absent allegations that are material, William Penn and Mid Penn will not necessarily announce such filings.

William Penn and Mid Penn could be subject to demands or litigation related to the Merger, whether or not the Merger is consummated. Such actions may create additional uncertainty relating to the Merger, and responding to such demands and defending such actions may be costly and distracting to management. Although there can be no assurance as to the ultimate outcomes of any demand or any subsequent litigation, we do not believe that the resolution of such demands or any subsequent litigation will have a material adverse effect on our financial position, results of operations or cash flow.

We and William Penn will be subject to various uncertainties while the Merger is pending that could adversely affect our financial results or the anticipated benefits of the Merger.

Uncertainty about the effect of the Merger on counterparties to contracts, employees and other parties may have an adverse effect on us or the anticipated benefits of the Merger. These uncertainties could cause contract counterparties and others who deal with us or William Penn to seek to change existing business relationships with us or William Penn, and may impair our or William Penn’s ability to attract, retain and motivate key personnel until the Merger is completed and for a period of time thereafter. Employee retention and recruitment may be particularly challenging prior to the completion of the Merger, as our employees and prospective employees, and the employees and prospective employees of William Penn, may experience uncertainty about their future roles with us following the Merger.

The pursuit of the Merger and the preparation for the integration of the two companies may place a significant burden on management and internal resources. Any significant diversion of management attention

 

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away from ongoing business and any difficulties encountered in the transition and integration process could affect our financial results prior to and/or following the completion of the Merger and could limit us from pursuing attractive business opportunities and making other changes to our business prior to completion of the Merger or termination of the Merger Agreement.

William Penn may have liabilities that are not known to us.

In connection with the Merger, we will assume all of William Penn’s liabilities by operation of law. There may be liabilities that we failed or were unable to discover in the course of performing due diligence investigations into William Penn, or we may not have correctly assessed the significance of certain liabilities of William Penn identified in the course of our due diligence. Any such liabilities, individually or in the aggregate, could have an adverse effect on our business, financial condition, and results of operations.

We expect to incur substantial transaction costs in connection with the Merger.

We expect to incur a significant amount of non-recurring expenses in connection with the Merger, including legal, accounting, consulting and other expenses. In general, these expenses are payable by us whether or not the Merger is completed. Additional unanticipated costs may be incurred following consummation of the Merger in the course of the integration of our businesses and the business of William Penn. We cannot be certain that the elimination of duplicative costs or the realization of other efficiencies related to the integration of the two businesses will offset the transaction and integration costs in the near term, or at all.

The unaudited pro forma financial information in this prospectus supplement is presented for illustrative purposes only and does not purport to be indicative of our financial condition or results of operations following the completion of the Merger.

The unaudited pro forma financial information in this prospectus supplement is presented for illustrative purposes only, is based on various adjustments, assumptions and preliminary estimates and may not be an indication of our financial condition or results of operations following the consummation of the offering made pursuant to this prospectus supplement or the Merger for several reasons. Our actual financial condition and results of operations following the consummation of the offering made pursuant to this prospectus supplement and the Merger may not be consistent with, or evident from, these pro forma financial statements. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect our financial condition or results of operations following the consummation of the offering made pursuant to this prospectus supplement and the Merger. Our potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by recent combined companies.

The Merger may be completed on different terms from those contained in the Merger Agreement.

Prior to the completion of the Merger, we and William Penn may, by mutual agreement, amend or alter the terms of the Merger Agreement, including with respect to, among other things, the Merger consideration or any covenants or agreements with respect to the parties’ respective operations during the pendency of the Merger Agreement. Any such amendments or alterations may have negative consequences to us.

The Merger will not be completed unless important conditions are satisfied or waived, including approval of the Merger Agreement by our shareholders and William Penn’s shareholders.

Specified conditions set forth in the Merger Agreement must be satisfied or waived to complete the Merger. If the conditions are not satisfied or, subject to applicable law, waived, the Merger will not occur or will be delayed and each of William Penn and us may lose some or all of the intended benefits of the Merger.

 

S-10

Risks Related to Our Primary Business and Industry

For risks associated with our primary business and industry, see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which is incorporated into this prospectus supplement by reference, as the same may be updated from time to time prior to the completion of this offering by our future filings under the Exchange Act.

 

S-11

USE OF PROCEEDS

The net proceeds, after underwriting discounts, to us from the sale of the shares of common stock offered hereby will be approximately $     (or approximately $     if the underwriters exercise in full their option to purchase additional shares).

We intend to use the net proceeds to us generated by this offering to support our continued growth, including investments in the Bank to support organic growth, potential redemption of subordinated debt, future strategic transactions and for other general corporate purposes. Our management will have broad discretion in the use of the net proceeds from the sale of common stock. Pending the use of the net proceeds of this offering as described above (or for other purposes), we may invest such proceeds in short-term, investment grade, interest-bearing securities.

 

S-12

CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2024:

 

•

on an actual basis;

 

•

on a pro forma basis giving effect to the Merger as if it had occurred on September 30, 2024; and

 

•

on an as adjusted basis after giving effect to our sale and issuance of      shares of common stock in this offering at a public offering price of $     per share and our receipt of $     in estimated net proceeds from this offering after deducting the underwriting discount and estimated offering expenses of this offering and assuming the underwriters do not exercise their option to purchase additional shares.

You should read the information in this table in conjunction with the “Use of Proceeds” included in this prospectus supplement, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes to those statements that are included in our Annual Report on Form 10-K for the year ended December 31, 2023, which are incorporated by reference into this prospectus supplement and the accompanying base prospectus. The pro forma information for the Merger includes estimated adjustments, including adjustments to record assets and liabilities of William Penn at their respective fair values, and represents preliminary pro forma estimates by the Company and William Penn. For further information, see “Summary—Recent Developments—William Penn Transaction” beginning on page S-1 of this prospectus supplement and the Current Report on Form 8-K filed by the Company with the SEC on November 1, 2024 that is incorporated by reference in this prospectus supplement.

 

		September 30, 2024
		Actual				As Adjusted for this Offering				As Adjusted for Both the Merger and this Offering
		(In thousands, except per share data)
Long-term Indebtedness
Subordinated debt			45,894
Shareholders’ Equity:
Preferred stock, par value $1.00 per share; 10,000,000 shares authorized; none issued and outstanding.			—				—				—
Common stock, par value $1.00 per share; 40,000,000 shares authorized; 17,060,896 issued and 16,620,174 at September 30, 2024 outstanding (actual), and      shares issued and      outstanding at offering at September 30, 2024 (as adjusted), and      shares issued and      outstanding at both the Merger and Offering at September 30, 2024 (as adjusted)			17,061
Additional paid-in capital			406,922
Retained earnings			172,234
Accumulated other comprehensive loss			(13,116	)
Treasury stock, at cost; 440,722 shares at September 30, 2024			(10,042	)
Total Shareholders’ Equity			573,059
Book value per common share			34.48

The Capitalization table above includes unaudited preliminary financial results of the Company and William Penn as of and for the periods indicated. These unaudited preliminary financial results have been prepared by, and are the responsibility of, the respective management teams. Our Quarterly Report on Form 10-Q for the

 

S-13

quarter ended September 30, 2024 will include our unaudited financial statements for the three and nine months ended September 30, 2024, including the footnote disclosures associated with our results, as well as management’s discussion and analysis of financial condition and results of operations. William Penn’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 will include William Penn’s unaudited financial statements for the three months ended September 30, 2024, including the footnote disclosures associated with William Penn’s results, as well as management’s discussion and analysis of financial condition and results of operations.

Our unaudited financial statements for the three and nine months ended September 30, 2024 and William Penn’s unaudited financial statements for the three months ended September 30, 2024 will not be available until after this offering is completed and, consequently, will not be available to you before your investment decision with respect to this offering. Preparation of our and William Penn’s Quarterly Reports on Form 10-Q for the quarter ended September 30, 2024 could result in changes to the unaudited preliminary financial results presented above.

 

S-14

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

Mid Penn is providing the following unaudited pro forma condensed combined financial data to aid investors in their analysis of the financial aspects of the Merger and the proposed offering described in this prospectus. See “Prospectus Supplement Summary - Recent Developments - William Penn Transaction.”

The unaudited pro forma combined condensed consolidated financial information has been prepared using the acquisition method of accounting under the provisions of the Financial Accounting Standards Board Accounting Standards Codification 805, “Business Combinations”, giving effect to the proposed Merger of William Penn with and into Mid Penn, with Mid Penn as the surviving corporation. Under this method, William Penn assets and liabilities as of the date of the acquisition will be recorded at their respective fair values and added to those of Mid Penn. Any difference between the purchase price for William Penn and the fair value of the identifiable net assets acquired (including core deposit intangibles) will be recorded as goodwill. The goodwill resulting from the acquisition will not be amortized to expense, but instead will be reviewed for impairment at least annually. Any core deposit intangible and other intangible assets with estimated useful lives to be recorded by Mid Penn in connection with the acquisition will be amortized to expense over such intangible asset’s estimated useful life. The financial statements of Mid Penn issued after the acquisition will reflect the results attributable to the acquired operations of William Penn beginning on the date of completion of the acquisition.

The following unaudited pro forma condensed combined financial information and accompanying notes are based on and should be read in conjunction with the following historical financial statements and accompanying notes, which are incorporated by reference into this filing:

 

•

the historical unaudited consolidated financial statements of Mid Penn as of and for the six months ended June 30, 2024 (included in Mid Penn’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024), and the historical audited consolidated financial statements of Mid Penn as of and for the year ended December 31, 2023 (included in Mid Penn’s Annual Report on Form 10-K for the year ended December 31, 2023); and

 

•

the historical audited consolidated financial statements of William Penn as of and for the twelve months ended June 30, 2024 (included in William Penn’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024), and the historical audited consolidated financial statements of William Penn as of and for the year ended June 30, 2023 (included in William Penn’s Annual Report on Form 10-K for the year ended June 30, 2023).

The unaudited pro forma condensed combined financial information is provided for illustrative information purposes only. The unaudited pro forma condensed combined financial information is not necessarily, and should not be assumed to be, an indication of the actual results that would have been achieved had the Merger been completed as of the dates indicated or that may be achieved in the future. The unaudited pro forma combined condensed financial statements have been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Information, which requires the depiction of the accounting for the transaction, which we refer to as transaction accounting adjustments. Regulation S-X also allows for management adjustments that could include presentation of the reasonably estimable cost savings and revenue enhancements and other transaction effects that have occurred or are reasonably expected to occur. Mid Penn has elected not to present management’s adjustments and will only be presenting transaction accounting adjustments in the following unaudited pro forma condensed combined financial information.

The following unaudited pro forma combined consolidated balance sheet as of June 30, 2024, combines the unaudited consolidated balance sheet of Mid Penn of June 30, 2024, with the audited statement of financial condition of William Penn as of June 30, 2024, giving effect to the transaction and the common stock offering described in this prospectus as if it had been consummated on June 30, 2024. The unaudited pro forma condensed combined statements of income for the six months ended June 30, 2024, combines the unaudited consolidated statements of income of Mid Penn for the six months ended June 30, 2024, with the unaudited consolidated

 

S-15

statement of income of William Penn for the six months ended June 30, 2024, giving effect to the transaction and the common stock offering described in this prospectus as if it had been consummated on January 1, 2023. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2023 combines the audited consolidated statements of income of Mid Penn for the year ended December 31, 2023 with the audited consolidated statements of income of William Penn for the year ended December 31, 2023, giving effect to the transaction and the common stock offering described in this prospectus as if it had been consummated on January 1, 2023. The unaudited pro forma financial statements assume a $70 million offering of common stock at a price of $31.09 per share as of October 25, 2024 (which was the latest practical trading date for purposes of preparing this presentation), as well as the full exercise of a 15% over-allotment option granted to the underwriters in the offering. Certain reclassification adjustments have been made to William Penn’ financial statements to conform to Mid Penn’s financial statement presentation.

Mid Penn and William Penn have different fiscal years. William Penn’s fiscal year ends on June 30 of each year and Mid Penn’s fiscal year ends on December 31 of each year. As the fiscal years differ by more than 93 days, pursuant to SEC rules, William Penn’s financial information was adjusted for the purpose of preparing the unaudited pro forma condensed statements of income. The historical income statement information of William Penn used in the unaudited pro forma condensed combined statements of income for the year ended December 31, 2023 was prepared by taking the audited condensed combined income statement for the year ended June 30, 2024, subtracting the unaudited condensed combined income statement for the six months ended June 30, 2024 and adding the unaudited condensed combined income statement for the six months ended June 30, 2023. The historical financial statement information of William Penn used in the unaudited pro forma condensed combined statements of income for the six months ended June 30, 2024 was prepared by taking the audited condensed combined income statement for the twelve months ended June 30, 2024 and subtracting the unaudited condensed combined income statement for the six months ended December 31, 2023.

The unaudited pro forma condensed consolidated financial statements were prepared with Mid Penn as the accounting acquirer and William Penn as the accounting acquiree under the acquisition method of accounting. Accordingly, the consideration paid by Mid Penn to complete the acquisition of William Penn will be allocated to William Penn’ assets and liabilities based upon their estimated fair values as of the date of completion of the acquisition. The allocation is dependent upon certain valuations and other studies that have not been finalized at this time; however, preliminary significant valuations based on the fair value of the acquired assets and liabilities have been estimated and included in the unaudited condensed pro forma financial statements.

The final allocation of the purchase price will be determined after the Merger is completed and after completion of thorough analyses to determine the fair value of William Penn’s tangible and identifiable intangible assets and liabilities as of the closing date. Increases or decreases in the estimated fair values of the net assets as compared with the information shown in the unaudited pro forma combined condensed consolidated financial information may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact Mid Penn’s consolidated statements of income due to adjustments in yield and/or amortization of the adjusted assets or liabilities. Any changes to William Penn’s shareholders’ equity, including results of operations from June 30, 2024, through the closing date will also change the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially different from the transaction accounting adjustments presented herein.

The pro forma statements of income and per share data information does not include anticipated cost savings or revenue enhancements. Mid Penn and William Penn are currently in the process of assessing the two companies’ personnel, benefits plans, premises, equipment, computer systems and service contracts to determine where the companies may take advantage of redundancies or where it will be beneficial or necessary to convert to one system. Certain decisions arising from these assessments may involve canceling contracts between either William Penn or Mid Penn and certain service providers. There is no assurance that the anticipated cost savings will be realized on the anticipated time schedule or at all.

 

S-16

The pro forma combined basic and diluted earnings per share of Mid Penn common stock is based on the pro forma combined net income per common share for William Penn and Mid Penn divided by the pro forma basic or diluted common shares of the combined entities for the periods presented on such statements of income. The pro forma information includes adjustments related to the fair value of assets and liabilities of William Penn and is subject to adjustment as additional information becomes available and as final merger date analyses are performed. The pro forma combined balance sheet and book value per share data includes the impact of Merger related expenses on the balance sheet with Mid Penn’s after-tax estimated charges of $9.3 million, illustrated as an adjustment to statements of income, retained earnings and to accrued other liabilities. The pro forma combined book value per share of Mid Penn common stock is based on the pro forma combined common stockholders’ equity of William Penn and Mid Penn divided by total pro forma common shares of the combined entities.

The unaudited pro forma data are qualified by the statements set forth under this caption and should not be considered indicative of the market value of Mid Penn common stock or the actual or future results of operations of Mid Penn for any period. Actual results may be materially different than the pro forma information presented.

Mid Penn Bancorp, Inc.

Unaudited Combined Pro Forma Balance Sheets as of June 30, 2024

($ In thousands, except per share data)

 

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined after Management Adjustments
Assets
Cash and due from banks		$	36,948			$	6,539			$	—			$	43,487			$	—			$	43,487
Interest-bearing balances with other financial institutions			25,585				12,070				—				37,655				76,475	(12)			114,130
Federal funds sold			43,193				1,589				—				44,782				—				44,782
Total cash and cash equivalents			105,726				20,198				—				125,924				76,475				202,399
Investment securities:
Investment securities held to maturity, at amortized cost			393,320				93,056				(16,229	) (3)			470,147				—				470,147
Investment securities available for sale, at fair value			207,936				150,855				—				358,791				—				358,791
Equity securities available for sale, at fair value			427				2,016				—				2,443				—				2,443
Loans held for sale			8,420				—				—				8,420				—				8,420
Loans and leases, net of unearned interest			4,364,561				473,561				(28,766	) (4)			4,809,356				—				4,809,356
Less: Allowance for loan and lease losses			(35,288	)			(2,989	)			(1,658	) (5)			(39,935	)			—				(39,935	)
Net loans and leases			4,329,273				470,572				(30,424	)			4,769,421				—				4,769,421
Bank premises and equipment, net			34,344				7,186				1,332	(6)			42,862				—				42,862

 

S-17

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined after Management Adjustments
Operating lease right of use asset			7,925				8,300				—				16,225				—				16,225
Finance lease right of use asset			2,638				—				—				2,638				—				2,638
Cash surrender value of life insurance			53,298				41,819				—				95,117				—				95,117
Restricted investment in bank stocks			13,930				3,062				—				16,992				—				16,992
Accrued interest receivable			27,381				2,886				—				30,267				—				30,267
Deferred income taxes			24,520				9,586				9,829	(7)			43,935				—				43,935
Goodwill			127,031				4,858				18,166	(1)			150,055				—				150,055
Core deposit and other intangibles, net			5,626				356				10,792	(8)			16,774				—				16,774
Foreclosed assets held for sale			441				—				—				441				—				441
Other assets			49,513				3,997				—				53,510				—				53,510
Total Assets		$	5,391,749			$	818,747			$	(6,534	)		$	6,203,962			$	76,475			$	6,280,437
Liabilities and Stockholders’ Equity
Deposits:
Noninterest-bearing demand		$	766,014			$	64,627			$	—			$	830,641			$	—			$	830,641
Interest-bearing transaction accounts			2,194,948				391,522				—				2,586,470				—				2,586,470
Time			1,536,049				173,661				(1,138	) (9)			1,708,572				—				1,708,572
Total Deposits			4,497,011				629,810				(1,138	)			5,125,683				—				5,125,683
Borrowings			223,827				50,891				—				274,718				—				274,718
Subordinated debt			46,047				—				—				46,047				—				46,047
Operating lease liability			8,344				8,553				—				16,897				—				16,897
Acccrued interest payable			18,139				71				—				18,210				—				18,210
Other liabilities			38,695				4,821				14,151	(11)			57,667				—				57,667
Total Liabilities			4,832,063				694,146				13,013				5,539,222				—				5,539,222
Shareholders’ equity:
Common stock			17,051				93				3,618	(1)(2)			20,762				2,589	(12)			23,351
Additional paid-in capital			406,544				97,723				15,875	(1)(2)			520,142				73,886	(12)			594,028
Unearned common stock held by employee stock ownership plan			—				(8,789	)			8,789	(1)(2)			—				—				—
Retained earnings			163,256				57,587				(69,842	) (2)(5)(11)			151,001				—				151,001
Accumulated other comprehensive income (loss)			(17,123	)			(22,013	)			22,013	(2)			(17,123	)			—				(17,123	)
Treasury stock			(10,042	)			—				—				(10,042	)			—				(10,042	)
Total Shareholders’ Equity			559,686				124,601				(19,547	)			664,740				76,475				741,215

 

S-18

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined after Management Adjustments
Total Liabilities and Shareholders’ Equity		$	5,391,749			$	818,747			$	(6,534	)		$	6,203,962			$	76,475			$	6,280,437
Per Share Data
Shares Outstanding			16,580,595				9,343,900				(5,633,075	) (1)			20,291,420				2,404,310				22,695,730
Book Value Per Share		$	33.76			$	13.34							$	32.76							$	32.66

Unaudited Pro Forma Combined Statements of Income for six months ended June 30, 2024

($ In Thousands, Except Per Share Data)

 

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments
Interest Income
Loans, including fees		$	129,332			$	12,796			$	3,126	(4)		$	145,254			$	—			$	145,254
Investment securities			8,930				3,277				5,335	(3)			17,542				—				17,542
Other interest-bearing balances			750				378				—				1,128				1,816	(12)			2,944
Federal funds sold			418				—				—				418				—				418
Total Interest Income			139,430				16,451				8,461				164,342				1,816				166,158
Interest Expense
Deposits			54,795				6,522				192	(9)			61,509				—				61,509
Borrowings			9,413				1,763				221	(10)			11,397				—				11,397
Total Interest Expense			64,208				8,285				413				72,906				—				72,906
Net Interest Income			75,222				8,166				8,048				91,436				1,816				93,252
Provision for credit losses - loans			1,163				(613	)			—				550				—				550
(Benefit)/Provision for credit losses CCL			(496	)			(23	)			—				(519	)			—				(519	)
Net Interest Income after Provision for Credit Losses			74,555				8,802				8,048				91,405				1,816				93,221
Noninterest Income
Fiduciary and wealth management			2,261				—				—				2,261				—				2,261
ATM debit card interchange			1,918				203				—				2,121				—				2,121
Service charges on deposits			1,048				240				—				1,491				—				1,491
Mortgage banking			1,052				—				—				1,052				—				1,052
Mortgage hedging			—				—				—				—				—				—
Net gain on sales of SBA loans			181				—				—				181				—				181
Earnings from cash surrender value of life insurance			585				640				—				1,225				—				1,225
Other income			4,121				279				—				4,197				—				4,197

 

S-19

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments
Total Noninterest Income			11,166				1,362				—				12,528				—				12,528
Noninterest Expenses
Salaries and employee benefits			30,995				5,982				—				36,977				—				36,977
Software licensing and utilization			4,328				1,034				—				5,362				—				5,362
Occupancy, net			3,843				1,420				17	(6)			5,280				—				5,280
Equipment			2,509				72				—				2,581				—				2,581
Shares tax			1,121				—				—				1,121				—				1,121
Legal and professional fees			1,687				439				—				2,126				—				2,126
ATM /card processing			1,044				46								1,090								1,090
Intangible amortization			853				81				877	(8)			1,811				—				1,811
FDIC Assessment			2,177				175				—				2,352				—				2,352
Loss/(Gain) on sale of foreclosed assets, net			42				4				—				46				—				46
Merger and acquisition			—				—				—				—				—				—
Post acquisition restructuring			—				—				—				—				—				—
Other expenses			8,145				1,308				—				9,453				—				9,453
Total Noninterest Expenses			56,744				10,561				894				68,199				—				68,199
Income before Provision for Income Taxes			28,977				(397	)			7,154				35,734				1,816				37,550
Provision for income tax expense			5,073				(375	)			1,502	(7)			6,200				381	(12)			6,581
Net Income Available for Common Shareholders		$	23,904			$	(22	)		$	5,652			$	29,534			$	1,435			$	30,969
Per Common Share Data:
Basic Earnings per Common share		$	1.44			$	(0.00	)			—				1.46				—				1.37
Diluted Earnings per Common Share		$	1.44			$	(0.00	)			—				1.45				—				1.36
Weighted-Average basic shares outstanding			16,572,102				8,272,581				(4,561,756	) (1)			20,282,927				2,404,310	(12)			22,687,237
Weighted-Average diluted shares outstanding			16,608,863				8,328,232				(4,617,407	) (1)			20,319,688				2,404,310	(12)			22,723,998

 

S-20

Unaudited Pro Forma Combined Income Statement for twelve months ended December 31, 2023

($ In Thousands, Except Per Share Data)

 

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined after Management Adjustments
Interest and Dividend Income
Loans, including fees		$	218,060			$	24,312			$	7,324	(4)		$	249,696			$	—			$	249,696
Investment securities			17,545				6,827				12,805	(3)			37,177				—				37,177
Other interest-bearing balances			361				678				—				1,039				3,633	(12)			4,672
Federal funds sold			373				—				—				373				—				373
Total Interest and Dividend Income			236,339				31,817				20,129				288,285				3,633				291,918
Interest Expense
Deposits			79,295				9,923				569	(9)			89,787				—				89,787
Borrowings			10,071				2,145				443	(10)			12,659				—				12,659
Total Interest Expense			89,366				12,068				1,012				102,446				—				102,446
Net Interest Income			146,973				19,749				19,117				185,839				3,633				189,472
Provision for credit losses—loans			3,295				30				3,718	(5)			7,043				—				7,043
(Benefit)/Provision for credit losses CCL			—				(45	)			—				(45	)			—				(45	)
Net Interest Income after Provision for Credit Losses			143,678				19,764				15,399				178,841				3,633				182,474
Noninterest Income
Fiduciary and wealth management			5,059				—				—				5,059				—				5,059
ATM debit card interchange			4,019				433				—				4,452				—				4,452
Service charges on deposits			1,943				430				—				2,373				—				2,373
Mortgage banking			1,353				—				—				1,353				—				1,353
Mortgage hedging			324				—				—				324				—				324
Net gain on sales of SBA loans			571				—				—				571				—				571
Earnings from cash surrender value of life insurance			1,112				1,162				—				2,274				—				2,274
Net gain on sales of investment securities			—				85				—				85				—				85
Other income			5,627				134				—				5,761				—				5,761
Total Noninterest Income			20,008				2,244				—				22,252				—				22,252
Noninterest Expenses
Salaries and employee benefits			59,345				12,118				—				71,463				—				71,463
Software licensing and utilization			7,927				1,931				—				9,858				—				9,858

 

S-21

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Transaction Accounting Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined before Management Adjustments				Management Adjustments				Mid Penn Bancorp, Inc. Pro Forma Combined after Management Adjustments
Occupancy, net			7,349				2,867				34	(6)			10,250				—				10,250
Equipment			5,121				184				—				5,305				—				5,305
Shares tax			2,713				—				—				2,713				—				2,713
Legal and professional fees			2,945				787				—				3,732				—				3,732
ATM /card processing			2,108				104				—				2,212				—				2,212
Intangible amortization			1,780				178				1,956	(8)			3,914				—				3,914
FDIC Assessment			3,500				361				—				3,861				—				3,861
Loss/(Gain) on sale of foreclosed assets, net			(144	)			—				—				(144	)			—				(144	)
Merger and acquisition			5,544				—				11,502	(11)			17,046				—				17,046
Post acquisition restructuring			2,952				—				—				2,952				—				2,952
Other expenses			17,852				2,607				—				20,459				—				20,459
Total Noninterest Expense			118,992				21,137				13,492				153,621				—				153,621
Income before Provision for Income Taxes			44,694				871				1,907				47,472				3,633				51,105
Provision for income tax expense			7,297				(33	)			632	(7)			7,896				763	(12)			8,659
Net Income Available for Common Shareholders		$	37,397			$	904			$	1,275			$	39,576			$	2,870			$	42,446
Per Share Data:
Basic Earnings per Common share		$	2.29			$	0.09			$	—			$	1.98			$	—			$	1.89
Diluted Earnings per Common Share		$	2.29			$	0.09			$	—			$	1.97			$	—			$	1.89
Weighted-Average basic shares outstanding			16,319,006				9,723,078				(6,012,253	) (1)			20,029,831				2,404,310	(12)			22,434,141
Weighted-Average diluted shares outstanding			16,350,963				9,766,144				(6,055,319	) (1)			20,061,788				2,404,310	(12)			22,466,098

 

S-22

Unaudited Pro Forma Per Share Data

For The Six Months Ended June 30, 2024

($ in Thousands, Except Per Share Data)

 

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Pro Forma Combined				Pro Forma Equivalent William Penn Share (A)
For The Six Months Ended June 30, 2024:
Earnings per share:
Net income per share (Basic)		$	1.44			$	(0.00	)		$	1.46			$	0.62
Net income per share (Diluted)		$	1.44			$	(0.00	)		$	1.45			$	0.62
Book Value per common share as of June 30, 2024		$	33.76			$	13.34			$	32.76			$	13.96

Unaudited Pro Forma Per Share Data

For The Twelve Months Ended December 31, 2023

($ in Thousands, Except Per Share Data)

 

		Mid Penn Bancorp, Inc.				William Penn Bancorporation				Pro Forma Combined				Pro Forma Equivalent William Penn Share (A)
For The Twelve Months Ended December 31, 2023:
Earnings per share
Net income per share (Basic)		$	2.29			$	0.09			$	1.89			$	0.81
Net income per share (Diluted)		$	2.29			$	0.09			$	1.89			$	0.80
Book Value per common share as of December 31, 2023		$	31.90			$	13.38			$	31.51			$	13.42

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

TRANSACTION ACCOUNTING ADJUSTMENTS:

 

(1)

At the closing date of the transaction, each share of William Penn’s common stock issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive 0.426 shares of Mid Penn common stock. In this pro forma analysis and assuming a Mid Penn common stock price of $31.09 as of October 25, 2024 (which was the latest practical trading date for purposes of preparing this presentation) the William Penn merger consideration per common share was assumed to equal $13.24. No fraction of a whole share of Mid Penn common stock shall be issued in connection with the Merger. Pursuant to the Merger Agreement, any former William Penn shareholder who would otherwise be entitled to receive a fraction of a share of Mid Penn common stock shall receive, in lieu thereof, cash , rounded to the nearest cent and without interest, equal to the product of (i) the fraction of a share of Mid Penn Common Stock entitled and (ii) the closing sale price of Mid Penn Common Stock on the fifth (5th) Business Day prior to the Closing Date.

At the closing date of the transaction, each William Penn restricted stock unit (a “William Penn RSU Award”) that is outstanding shall be cancelled and converted automatically into the right to receive the merger consideration payable pursuant to the Merger Agreement, and treating shares of William Penn common stock subject to such William Penn RSU Award in the same manner as all other shares of William Penn common stock for such purposes.

 

S-23

At the closing date of the transaction each option to purchase shares of William Penn common stock (“William Penn Options”) that is outstanding and unexercised shall be converted into Mid Penn options. In this pro forma analysis these William Penn Options were converted into Mid Penn options based on their estimated fair value of $1.9 million.

In connection with William Penn’s second-step conversion offering, completed on March 21, 2021, the William Penn Bank Employee Stock Ownership Plan (“William Penn ESOP”) trustees subscribed for, and intended to purchase, on behalf of the ESOP, 8.00% of the shares of the Company common stock sold in the offering and to fund its stock purchase through a loan from the Company equal to 100% of the aggregate purchase price of the common stock. The second-step conversion offering being oversubscribed in the first tier of subscription priorities, the ESOP trustees were unable to purchase shares of the William Penn’s common stock in the second-step conversion offering. Subsequent to the completion of the second-step conversion on March 24, 2021, the ESOP trustees purchased 881,130 shares, or $10.1 million, of William Penn’s common stock in the open market.

In accordance with the Merger Agreement, the William Penn ESOP shall be terminated immediately prior to the closing date of the transaction (the “ESOP Termination Date”). On the ESOP Termination Date, William Penn shall direct the William Penn ESOP trustee(s) to remit to William Penn a sufficient number of shares of William Penn common stock held by the William Penn ESOP’s unallocated suspense account to William Penn to repay the full outstanding balance of the loan between the William Penn ESOP and William Penn (the “William Penn ESOP Loan”) (and with such William Penn common stock valued on the ESOP Termination Date) and, if after remitting such shares there remains any unpaid amount under the William Penn ESOP Loan, such unpaid amount, including any unpaid but accrued interest, shall be forgiven by William Penn at the closing date of the transaction. All remaining shares of William Penn common stock held by the William Penn ESOP as of the Effective Time shall be converted into the right to receive the merger consideration. In this pro forma analysis it was assumed that the William Penn ESOP Loan had a balance of $8,384,250 and was paid off with the retirement of 633,044 William Penn shares ($8.4 million divided by the William Penn assumed merger consideration per share of $13.24).

At the close of the transaction, all shares of William Penn common stock held in the treasury of William Penn (“Treasury Stock”), prior to the closing of the transaction shall be cancelled, and no payment or distribution shall be made in consideration therefor.

 

S-24

The total estimated purchase price for the purpose of this pro forma financial information is $117.3 million The adjustment for shares outstanding, basic, and diluted weighted average common shares outstanding is an amount to adjust the shares to equal the new common shares issued for the transaction. The following is a summary of the fair value of assets acquired and liabilities assumed resulting in goodwill. Goodwill is created when the purchase price consideration exceeds the fair value of the net assets acquired or a bargain purchase gain results when the current fair value of the net assets acquired exceeds the purchase price consideration. For purposes of this analysis as of June 30, 2024, goodwill of $23.0 million results from the transaction; however, the final purchase accounting analysis will be performed as of the merger date and amounts therein are subject to change based on operations subsequent to June 30, 2024, as additional information becomes available and as additional analyses are performed.

 

(dollars in thousands, except per share data)
Purchase price
William Penn Bancorporation common shares as of 6/30/2024 settled for stock			9,343,900
ESOP loan balance			8,384,250
Transaction price per share		$	13.24
Estimated shares of William Penn Bancorporation Common Stock to pay off ESOP Loan			633,044
William Penn Bancorporation common shares as of 6/30/2024 settled for stock			8,710,856
Exchange ratio			0.4260
Mid Penn Bancorp, Inc. shares to be issued			3,710,825
Price per share of common stock (closing stock price as of October 25, 2024)		$	31.09
Purchase price consideration for common stock		$	115,370
Purchase Price Consideration - Rollover of Outstanding Options
William Penn Bancorporation stock options outstanding			1,264,000
Transaction price per share		$	13.24
Weighted average strike price for options		$	11.71
In-the-money value for stock options cashed out		$	1.53
Purchase price assigned to stock options rolled over		$	1,939
Total purchase price consideration		$	117,309

 

S-25

(dollars in thousands)		William Penn Bancorporation Book Value 6/30/2024				Fair Value Adjustments				William Penn Bancorporation Fair Value 6/30/2024
Total purchase price consideration										$	117,309
Recognized amounts of identifiable assets acquired and liabilities assumed
Cash and cash equivalents		$	18,609			$	—			$	18,609
Federal funds sold			1,589				—				1,589
Investment securities held to maturity, at amortized cost			93,056				(16,229	) (3)			76,827
Investment securities available for sale, at fair value			150,855								150,855
Equity securities			2,016				—				2,016
Loans gross			473,561				(29,695	) (4)			443,866
Allowance for credit losses			(2,989	)			2,989	(5)			—
Loans, net of allowance			470,572				(26,706	)			443,866
Bank premises and equipment, net			7,186				1,332	(6)			8,518
Operating lease right of use asset			8,300				—				8,300
Cash surrender value of life insurance			41,819				—				41,819
Restricted investment in bank stocks			3,062				—				3,062
Accrued interest receivable			2,886				—				2,886
Deferred income taxes			9,586				6,864	(7)			16,450
Core deposit intangible			—				11,148	(8)			11,148
Other assets			3,997				—				3,997
Total identifiable assets acquired			813,533				(23,591	)			789,942
Deposits
Noninterest-bearing demand			64,627				—				64,627
Interest-bearing transaction accounts			391,522				—				391,522
Time			173,661				(1,138	) (9)			172,523
Total deposits			629,810				(1,138	)			628,672
Borrowings			50,891				—				50,891
Operating lease liability			8,553				—				8,553
Accrued interest payable			71				—				71
Other liabilities			4,821				2,649	(10)			7,470
Total liabilities assumed			694,146				1,511				695,657
Total identifiable net assets			119,387				(25,102	)			94,285
Goodwill										$	23,024

 

S-26