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Postretirement Benefit Plans
 12 Months Ended
Dec. 31, 2025
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Postretirement Benefit Plans Postretirement Benefit Plans
Mid Penn has a postretirement healthcare and life insurance benefit plan, which is noncontributory, covering certain full-time employees. Mid Penn also assumed noncontributory defined benefit pension plans as a result of the acquisitions of Scottdale on January 8, 2018 and Riverview on November 30, 2021. None of Mid Penn’s plans contained a promised interest crediting rate.
Service costs related to plans benefiting Mid Penn employees are reported as a component of salaries and employee benefits on the Consolidated Statements of Income, while interest costs, expected return on plan assets, amortization (accretion) of prior service cost, and settlement gain are reported as a component of other income. Service costs, interest costs, and amortization of prior service costs related to plans benefiting Mid Penn’s nonemployee directors are reported as a component of director fees and benefits expense within the other expense line item on the Consolidated Statement of Income.
The accrued benefit liability, related income statement impacts, and other significant aspects of the plans are detailed below.
Life Insurance - Full-time employees who had at least ten years of service as of January 1, 2008 and retire with the Bank after age 55 and at least 20 years of service are eligible for term life insurance coverage. The insurance amount is $50 thousand until age 65, and decreases by $5 thousand per year until age 74. Thereafter, the insurance amount will be $5 thousand. The Corporation's obligation to pay life insurance premiums terminates if the retired employee obtains other employment.
Health Benefit Plan - Full-time employees who had at least 10 years of service as of January 1, 2008 and who retire at age 55 or later, after completion of at least 20 years of service, are eligible for medical benefits. Medical benefits may be provided for up to five years after retirement.
Employees who retired prior to December 31, 2015 may elect the least expensive single coverage in the employer’s group medical plan. If the retiree becomes eligible for Medicare during the five year duration of coverage, the Bank may, at its discretion, pay premiums for Medicare supplemental or similar coverage.
For employees who retired between September 18, 2015 and December 31, 2015, the Bank may pay up to $5 thousand toward postretirement medical coverage.
Employees who retired after December 31, 2015 may not participate in the employer’s group medical plan. Instead, the Bank may reimburse the retiree for up to $5 thousand (grossed up by 36.79% as of December 31, 2025) in medical costs. Reimbursement terminates at any time during the five-year period if the retired employee obtains other employment or the retired employee dies.
The following tables present a reconciliation of the changes in the plan’s health and life insurance benefit obligations and fair value of plan assets for the years ended December 31, 2025 and 2024, and a statement of the funded status as of December 31, 2025 and 2024.
(In thousands)December 31,
Change in benefit obligations:20252024
Benefit obligations, January 1$226 $271 
Service cost1 1 
Interest cost11 11 
Change in experience1 (28)
Change in assumptions5 (7)
Benefit payments(20)(22)
Benefit obligations, December 31$224 $226 
Change in fair value of plan assets:
Fair value of plan assets, January 1$— $— 
Employer contributions20 22 
Benefit payments(20)(22)
Fair value of plan assets, December 31— — 
Funded status at year end$(224)$(226)
Mid Penn has capped the benefit to future retirees under its post-retirement health benefit plan. Employees who had achieved ten years of service as of January 1, 2008 and subsequently retire after at least 20 years of service are eligible for reimbursement of major medical insurance premiums up to $5 thousand if the employee has not yet reached age 65.
Upon becoming eligible for Medicare, Mid Penn may reimburse up to $5 thousand for Medicare Advantage or similar supplemental coverage. The maximum reimbursement period will not exceed five years, regardless of retirement age, and will end upon the participant obtaining other employment or death.
The amount recognized in other liabilities on the Consolidated Balance Sheets as of December 31, is as follows:
(In thousands)20252024
Accrued benefit liability$224 $226 
The amounts recognized in accumulated other comprehensive income as of December 31 consist of:
(In thousands)20252024
Net gain, pretax$(51)$(65)
Net prior service cost, pretax— — 
The accumulated benefit obligation for health and life insurance plans was $224 thousand and $226 thousand as of December 31, 2025 and 2024, respectively.
The components of net periodic postretirement benefit cost for 2025, 2024 and 2023 are as follows:
(In thousands)202520242023
Service cost$1 $1 $1 
Interest cost11 11 13 
Amortization of prior service cost— — 10 
Amortization of net gain(8)(7)(2)
Net periodic postretirement benefit cost$4 $5 $22 
Weighted-average assumptions used in the measurement of Mid Penn's benefit obligations as of December 31 are as follows:
Weighted-average assumptions:20252024
Discount rate5.07 %5.32 %
Rate of compensation increase— — 
Weighted-average assumptions used in the measurement of Mid Penn’s net periodic benefit cost for the years ended December 31 are as follows:
Weighted-average assumptions:202520242023
Discount rate5.32 %4.67 %4.90 %
Rate of compensation increase— — — 
Assumed health care cost trend rates as of December 31 are as follows:
202520242023
Health care cost trend rate assumed for next year8.00%7.00%7.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)5.50%5.50%5.50%
Year that the rate reaches the ultimate trend rate202920282027
The following table shows the estimated benefit payments for future periods:
(In thousands)
2026$28 
202728 
202827 
202918 
203014 
2031-203567 
Directors’ Retirement Plan - Mid Penn had an unfunded defined benefit retirement plan ("Director's Plan") for directors with benefits based on years of service.
On October 1, 2023, the Bank decided to terminate the Plan and pay out any benefits to participants in a lump sum cash payout of $1.3 million, which was paid out on October 1, 2024.
The following tables provide a reconciliation of the changes in the Director's Plan benefit obligations and fair value of plan assets for the years ended December 31, 2025 and 2024, and a statement of the status as of December 31, 2025 and 2024. This Plan was unfunded.
(In thousands)December 31,
Change in benefit obligations:20252024
Benefit obligations, January 1$— $1,306 
Service cost— — 
Interest cost— — 
Actuarial loss — — 
Change in assumptions— — 
Benefit payments— (1,306)
Benefit obligations, December 31$— $— 
Change in fair value of plan assets:
Fair value of plan assets, January 1$— $— 
Employer contributions— 1,306 
Benefit payments— (1,306)
Fair value of plan assets, — — 
Funded status at year end$— $— 
Amounts recognized in other liabilities on the Consolidated Balance Sheet as of December 31 are as follows:
(In thousands)20252024
Accrued benefit liability$— $— 
Amounts recognized in accumulated other comprehensive loss (income) as of December 31 consist of:
(In thousands)20252024
Net prior service cost, pretax$— $— 
Net loss, pretax— — 
The accumulated benefit obligation for the retirement plan was zero as of December 31, 2025 and 2024, respectively.
The components of net periodic retirement cost for 2025, 2024 and 2023 are as follows:
(In thousands)202520242023
Service cost$— $— $56 
Interest cost— — 61 
Amortization of net loss— — 34 
Net periodic retirement cost$— $— $151 
Weighted-average assumptions used in the measurement of Mid Penn’s benefit obligations as of December 31 are as follows:
Weighted-average assumptions:20252024
Discount rate—%—%
Change in consumer price index——
Weighted-average assumptions used in the measurement of Mid Penn’s net periodic benefit cost for the years ended December 31 are as follows:
Weighted-average assumptions:202520242023
Discount rate—%—%4.80%
Change in consumer price index——3.40
The Bank is the owner and beneficiary of insurance policies on the lives of certain officers and directors, which informally fund the retirement plan obligation. The aggregate cash surrender value of these policies was $4.0 million and $4.3 million as of December 31, 2025 and 2024, respectively.
Scottdale Defined Benefit Pension Plan - As a result of the acquisition of Scottdale on January 8, 2018, Mid Penn has assumed a noncontributory defined benefit pension plan ("Scottdale Plan") covering certain former employees of Scottdale. After the acquisition, Mid Penn did not allow for any further participants to join the Plan. Mid Penn’s policy is to fund pension benefits as accrued. The Scottdale Plan’s assets are managed by the trust department of the Bank and were primarily invested in corporate equity securities at the time of acquisition but have since been diversified into a more conservative investment profile, including fixed income debt securities. The investment objective of the plan is "Balanced" to provide relatively stable growth from assets offset by a moderate level of income with target portfolio allocations of up to 20% cash, 30-50% fixed income securities, and 40-60% equity securities. The valuation of the plan’s assets is subject to market fluctuations.
For the year ended December 31, 2025, Mid Penn recognized $192 thousand of settlement gains. For the year ended December 31, 2024, Mid Penn recognized no settlement gains. The settlement gains were recorded in noninterest income as a component of other income in the Consolidated Statements of Income for the year ended December 31, 2025.
The following tables provide a reconciliation of the changes in the Scottdale Plan’s benefit obligations and fair value of plan assets for the year ended December 31, 2025 and 2024, and a statement of the status as of December 31, 2025 and 2024:
(In thousands)December 31,
Change in benefit obligations:20252024
Benefit obligations, January 1$2,547 $2,659 
Service cost15 25 
Interest cost136 130 
Settlement loss4 — 
Actuarial gain(35)(97)
Settlement payments(493)— 
Benefit payments(87)(170)
Benefit obligations, December 31$2,087 $2,547 
Change in fair value of plan assets:
Fair value of plan assets, January 1$3,597 $3,468 
Return on plan assets415 328 
Employer contributions— — 
Benefit payments(87)(170)
Administrative expenses(29)(29)
Settlement payments(493)— 
Fair value of plan assets, December 313,403 3,597 
Funded status at year end$1,316 $1,050 
Amounts recognized on the Consolidated Balance Sheets as of December 31 are as follows:
(In thousands)20252024
Accrued pension benefit asset$1,316 $1,050 
Amounts recognized in accumulated other comprehensive loss consist of the following as of December 31:
(In thousands)20252024
Unrecognized actuarial gain$813 $798 
The accumulated benefit obligation for the retirement plan was $2.1 million and $2.5 million as of December 31, 2025 and 2024, respectively.
The components of net periodic retirement cost for December 31 are as follows:
(In thousands)202520242023
Service cost$15 $25 $58 
Interest cost136 130 197 
Expected return on plan assets(159)(153)(211)
Recognized net actuarial gain(52)(25)(63)
Net periodic retirement income$(60)$(23)$(19)
Weighted-average assumptions used in the measurement of Mid Penn’s benefit obligations and net periodic pension costs as of December 31 are as follows:
Weighted-average assumptions:202520242023
Discount rate5.50%5.50%5.00%
Expected long-term return on plan assets4.504.504.50
Rate of compensation increases2.502.502.50
The following table presents a summary of the Scottdale Plan’s assets at fair value and the weighted-average asset allocations by investment category as of December 31:
Estimated Fair ValuePercentage of Total AssetsEstimated Fair ValuePercentage of Total Assets
(Dollars in thousands)20252024
Cash and cash equivalents$365 10.7 %$263 7.3 %
Common stock1,894 55.7 2,081 57.9 
Corporate bonds1,144 33.6 1,253 34.8 
$3,403 100.0 %$3,597 100.0 %
The description of the valuation methodologies used for assets measured at fair value is disclosed below.
Common Stocks
Valued at the closing price reported on the active market on which the individual securities are traded and therefore would be categorized as Level 1 assets under the fair value hierarchy.
Corporate Bonds
Valued using matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities but rather relying on the securities’ relationship to other benchmark quoted prices and therefore would be categorized as Level 2 assets under the fair value hierarchy.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table shows the estimated benefit payments for future periods:
(In thousands)
2026$108 
2027124 
2028155 
2029154 
2030178 
2031-2035840 
Riverview Defined Benefit Plan - As a result of the Riverview Acquisition on November 30, 2021, Mid Penn assumed noncontributory defined benefit pension plans ("Riverview Plans") covering certain former employees of Riverview (or its predecessor-in-interest) as follows:
Pursuant to the consolidation with Union Bancorp, Inc. ("Union") effective November 1, 2013, Riverview assumed Union’s noncontributory defined benefit pension plan, which substantially covered all Union employees. The plan
benefits were based on average salary and years of service. Union elected to freeze all benefits earned under the plan effective January 1, 2007.
Riverview also assumed responsibility of Citizens National Bank of Meyersdale’s ("Citizens") noncontributory defined benefit pension plan effective as of the December 31, 2015 merger date. The plan substantially covered all Citizens employees, and the plan benefits were based on average salary and years of service. Citizens elected to freeze all benefits earned under the plan effective January 1, 2013.
As a result of a merger effective October 1, 2017, Riverview assumed responsibility of CBT Financial Corp’s ("CBT") postretirement benefit plan, which is an unfunded postretirement benefit plan covering health insurance costs and post-retirement life insurance benefits for certain retirees.
Subsequent to the Riverview Acquisition, Mid Penn disallowed any further participants to join the Riverview Plans. Mid Penn’s policy is to fund pension and post-retirement benefits as accrued. The Riverview Plans’ assets are managed by a third party and were primarily invested in a combination of cash and cash equivalents, equity securities and fixed income securities at the time of acquisition. The valuation of the Riverview Plans’ assets is subject to market fluctuations.
The following tables provide a reconciliation of the changes in the Riverview Plans' benefit obligations and fair value of plan assets for year ended December 31, 2025, and a statement of the status as of December 31:
(In thousands)
Change in benefit obligations:20252024
Benefit obligations, January 1$5,740 $6,442 
Interest cost302 299 
Actuarial loss(8)(483)
Benefit payments(508)(518)
Benefit obligations, December 31$5,526 $5,740 
Change in fair value of plan assets:
Fair value of plan assets, January 1,$6,711 $6,895 
Return on plan assets697 329 
Contributions— 3 
Benefit payments(505)(516)
Fair value of plan assets, December 316,903 6,711 
Funded status at year end$1,377 $971 
Amounts recognized in other liabilities on the Consolidated Balance Sheets as of December 31 are as follows:
(In thousands)20252024
Accrued pension benefit asset$1,377 $971 
As of December 31, 2025 amounts related to the Riverview Plans that have been recognized in accumulated other comprehensive loss but not yet recognized as a component of net periodic pension cost are as follows:
(In thousands)20252024
Unrecognized actuarial gain $153 $415 
The components of net periodic pension and postretirement benefit cost for the year ended December 31, 2025 and 2024 are as follows:
(In thousands)202520242023
Interest cost$302 $299 $309 
Expected return on plan assets(387)(397)(387)
Amortization of net loss10 12 — 
Net periodic pension benefit$(75)$(86)$(78)
(In thousands)202520242023
Service credit$— $— $— 
Interest cost1 1 1 
Unrecognized gain(1)(1)(1)
Net periodic postretirement benefit $— $— $— 
The accumulated benefit obligation was $5.5 million and $5.7 million as of December 31, 2025 and 2024, respectively, for the Riverview Plans.
Weighted-average assumptions used in the measurement of Mid Penn’s benefit obligations and net periodic pension costs as of December 31, 2025 and 2024 are as follows:
Pension BenefitsPostretirement
Life Insurance
Benefits
2025UnionCitizensCBT
Discount rate5.54 %5.54 %4.99 %
Expected long-term return on plan assets6.00 6.00 n/a
2024
Discount rate4.83 %4.83 %5.32 %
Expected long-term return on plan assets6.00 6.00 n/a
The following summarizes the actuarial assumptions used for the Riverview Plans:
For the pension plan, the selected long-term rate of return on plan assets was primarily based on the asset allocation of the plan’s assets. Analysis of the historic returns on these asset classes and projections of expected future returns were considered in setting the long-term rate of return.
The benefit offered under the postretirement benefit plan is fixed; therefore, the accumulated postretirement benefit obligation is not impacted by health care cost trends or the rate of compensation increase.
The following table presents a summary of the Riverview Plan’s assets at fair value and the weighted-average asset allocations by investment category as of December 31:
(Dollars in thousands)Estimated Fair ValuePercentage of Total AssetsEstimated Fair ValuePercentage of Total Assets
Weighted-average asset allocations:20252024
Cash and cash equivalents$60 0.9 %$60 0.9 %
Mutual fund - equity2,618 37.9 2,619 39.0 
Mutual fund / EFTs - fixed income3,926 56.9 3,716 55.4 
Common / collective trusts equity299 4.3 316 4.7 
$6,903 100 %$6,711 100 %
The valuation used is based on quoted market prices provided by an independent third party. The fair values of mutual fund investments are considered Level 1 assets in the fair value hierarchy and the collective trusts equity are considered Level 2 assets.
The following table shows the estimated benefit payments for future periods:
(In thousands)Pension BenefitsPostretirement
Life Insurance
Benefits
2026$511 $4 
2027498 3 
2028499 3 
2029490 3 
2030478 3 
2031-20352,154 9