XML 155 R11.htm IDEA: XBRL DOCUMENT v3.25.4
Business Combinations
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations Business Combinations
Commonwealth Benefits Group Acquisition
On July 31, 2024, Mid Penn acquired the insurance business and related accounts of a full-service employee benefits firm that serves mid to large employers across central and eastern Pennsylvania, northern Maryland, and northern Virginia, for a purchase price of $2.0 million at closing and an additional $800 thousand potentially payable pursuant to a three-year earnout.
Mid Penn has recognized total goodwill of $1.1 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair value of identifiable assets acquired.
Mid Penn incurred expenses related to the Commonwealth Benefits Group acquisition of $545 thousand for the year ended December 31, 2024, which is included in noninterest expense in the Consolidated Statements of Income.
Charis Insurance Group, Inc. Acquisition
On May 12, 2025, Mid Penn acquired the insurance business and related accounts of Charis Insurance Group, Inc. (Charis Insurance Group), which provides business, home and auto insurance throughout central and southern Pennsylvania, for a cash purchase price of $4.0 million.
Mid Penn has recognized total goodwill of $1.6 million, which is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair value of identifiable assets acquired.
Mid Penn incurred expenses related to the Charis Insurance Group acquisition of $164 thousand for the year ended December 31, 2025, which is included in noninterest expense in the Consolidated Statements of Income.
William Penn Acquisition
On April 30, 2025, Mid Penn completed its acquisition of 100% of the outstanding shares of William Penn through the merger of William Penn with and into Mid Penn.
This transaction included the acquisition of 12 branches, further expanding Mid Penn's presence in the Philadelphia region and surrounding counties in Pennsylvania and New Jersey.
The merger was an all-stock transaction valued at approximately $103.2 million, based on Mid Penn's common stock closing price of $29.05 on April 30, 2025. Each share of William Penn common stock issued and outstanding as of April 30, 2025, was converted into 0.426 shares of Mid Penn common stock. As a result of the acquisition, Mid Penn issued 3,506,795 shares of Mid Penn common stock as consideration for the $103.2 million purchase price. The Corporation also granted replacement awards for 538,447 stock options, with a fair value of $3.1 million to continuing employees of William Penn. Of this amount, $1.3 million related to pre-combination vesting and was included in purchase price consideration, and $1.8 million related to post-combination vesting and will be recognized as expense of the combined company over the remaining vesting period.
Mid Penn has recognized total goodwill of $6.9 million, and a core deposit intangible asset of $9.0 million as a result of this acquisition. This is calculated as the excess of both the consideration exchanged and liabilities assumed compared to the fair value of identifiable assets acquired. Goodwill is primarily comprised of expected synergies and an assembled workforce. Goodwill is not deductible for income tax purposes.
Mid Penn incurred merger-related expenses related to the William Penn Acquisition of $10.1 million for the year ended December 31, 2025, respectively, which is included in noninterest expense in the Consolidated Statements of Income.
Purchased loans and leases that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. Mid Penn considers various factors in connection with the identification of more-than-insignificant deterioration in credit, including but not limited to nonperforming status, delinquency, risk ratings, FICO scores and other qualitative factors that indicate deterioration in credit quality since origination. For PCD loans and leases, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and leases held-for-investment.
As part of the William Penn Acquisition, Mid Penn acquired non-PCD and PCD loans and leases of $355.5 million and $49.8 million, respectively. The initial provision expense for non-PCD loans associated with the William Penn Acquisition was $2.3 million. The non-credit discount on the PCD loans and leases was $15 thousand and the Day 1 fair value adjustment was $343 thousand.
Estimated fair values of the assets acquired and liabilities assumed in the William Penn Acquisition as of the closing date are as follows:
(In thousands)
Assets acquired:
Cash and cash equivalents$41,404 
Federal funds sold553 
Investment securities186,564 
Loans405,271 
Core deposit intangible9,002 
Premises and equipment6,858 
Operating lease right-of-use asset6,340 
Cash surrender value of life insurance42,928 
Deferred income taxes15,399 
Accrued interest receivable2,271 
Other assets9,947 
Total assets acquired$726,537 
Liabilities assumed:
Deposits:
Noninterest-bearing demand$61,677 
Interest-bearing demand121,522 
Money market178,285 
Savings76,983 
Time181,293 
Operating lease liability6,340 
Accrued interest payable29 
Other liabilities4,052 
Total liabilities assumed$630,181 
Consideration transferred$103,213 
Fair value of common stock issued103,206 
Cash paid in lieu of fractional shares7 
Total$103,213 
Reconciliation to consideration transferred:
Total assets acquired726,537 
Total liabilities assumed630,181 
Net assets acquired96,356 
Goodwill6,857 
Consideration transferred$103,213 
The fair values of assets acquired and liabilities assumed are based on preliminary estimates and, as permitted under GAAP, Mid Penn has up to twelve months following the date of the merger to finalize the fair values of the acquired assets and assumed liabilities related to the merger. During the year ended December 31, 2025, the Company recorded measurement period adjustments related primarily to income taxes, resulting in a decrease to goodwill of $1.1 million. The Company remains within the one-year measurement period as of December 31, 2025.
From the acquisition date of April 30, 2025 through December 31, 2025, William Penn contributed approximately $14.2 million of total revenue and $653 thousand of net income to Mid Penn's consolidated results for the year ended December 31, 2025.
The following supplemental unaudited pro forma information presents certain financial results for the year ended December 31, 2025 and 2024 as if the merger of William Penn was effective as of January 1, 2024. The supplemental unaudited pro forma financial information included in the table below is based on various estimates and is presented for informational purposes only and does not indicate the results of operations of the combined company that would have been achieved for the periods presented had the transaction been completed as of the date indicated or that may be achieved in the future.
(Unaudited)
(In thousands)Year Ended December 31,
20252024
Net interest income after provision for credit losses - loans$206,082 $172,535 
Noninterest income27,977 25,476 
Noninterest expense152,449 139,678 
Net income$56,676 $48,229 
1st Colonial Acquisition
On September 24, 2025, Mid Penn entered into a Merger Agreement with 1st Colonial, in a cash and stock deal valued at nearly $101 million. On February 27, 2026, Mid Penn completed its acquisition of 1st Colonial. At the effective time of the Merger, 1st Colonial merged with and into Mid Penn with Mid Penn surviving the Merger. Promptly following the Merger, 1st Colonial Community Bank, 1st Colonial's wholly owned bank subsidiary, merged with and into the Bank with the Bank surviving.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each share of 1st Colonial's common stock, par value $0.0 per share, issued and outstanding immediately prior to the effective time of the Merger, was converted into the right to receive, at the election of the holder of such shares of 1st Colonial common stock, and subject to adjustment and proration as described in the Merger Agreement, either (a) 0.6945 of a share of Mid Penn common stock and cash in lieu of fractional shares or (b) $18.50 in cash.
Cumberland Advisors Acquisition
On September 25, 2025, Mid Penn entered into an agreement to acquire Cumberland Advisors, Inc., a registered investment advisory firm, for a purchase price at closing of $5.5 million, and the acquisition was completed on January 1, 2026. Seventy percent of the purchase price was paid in Mid Penn common stock, with the remaining balance paid in cash. The agreement also provides for a potential additional cash payment by Mid Penn of up to $1.0 million pursuant to an earn-out arrangement, as well as the issuance of approximately 300,000 stock appreciation rights having a maximum aggregate value of $1.2 million.