-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jg0keDOiejsXR+7htiKjcTbALq7YUzWP4E03g8hcdw7b7QjyHFkwCOz6mE0rPBiP kSP4VXgYW/40Gh49YpMLBw== 0001135428-08-000202.txt : 20080508 0001135428-08-000202.hdr.sgml : 20080508 20080508125144 ACCESSION NUMBER: 0001135428-08-000202 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20080331 FILED AS OF DATE: 20080508 DATE AS OF CHANGE: 20080508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID PENN BANCORP INC CENTRAL INDEX KEY: 0000879635 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 251666413 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13677 FILM NUMBER: 08812901 BUSINESS ADDRESS: STREET 1: 349 UNION ST CITY: MILLERSBURG STATE: PA ZIP: 17061 BUSINESS PHONE: 7176922133 MAIL ADDRESS: STREET 1: 349 UNION STREET STREET 2: 349 UNION STREET CITY: MILLERSBURG STATE: PA ZIP: 17061 10-Q 1 midpenn10q.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- Form 10-Q ----------------- QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2008 Commission file number 001-13677 Mid Penn Bancorp, Inc. (Exact name of registrant as specified in its charter) Pennsylvania 25-1666413 (State or other jurisdiction of (IRS Employer ID No) Incorporation or Organization) 349 Union Street, Millersburg, PA 17061 (Address of principal executive offices) (Zip Code) (717) 692-2133 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. [ ] Large accelerated [X] Accelerated [ ] Non-accelerated [ ] Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) [ ] Yes [X] No Indicate the number of shares outstanding of each of the classes of common stock, as of the latest practical date. 3,486,095 shares of Common Stock, $1.00 par value per share, were outstanding as of May 1, 2008. ================================================================================ PART I MID PENN BANCORP, INC. ITEM I: FINANCIAL STATEMENTS MID PENN BANCORP, INC. CONSOLIDATED BALANCE SHEETS (In thousands) MAR. 31 DEC. 31 2008 2007 --------- --------- (UNAUDITED) (AUDITED) ASSETS: Cash and due from banks $ 9,663 $ 10,599 Interest-bearing balances 61,061 46,830 Available-for-sale securities 55,945 54,072 Federal funds sold 0 0 Loans 389,178 377,128 Less, Allowance for loan and lease losses 4,867 4,790 --------- --------- Net loans 384,311 372,338 --------- --------- Bank premises and equip't, net 10,746 10,638 Foreclosed assets held for sale 445 529 Accrued interest receivable 2,645 2,818 Goodwill 1,016 1,016 Core deposit intangible, net 346 362 Cash surrender value of life insurance 7,023 6,961 Deferred income taxes 1,933 2,053 Other assets 840 1,541 --------- --------- Total Assets 535,974 509,757 ========= ========= LIABILITIES & STOCKHOLDERS' EQUITY: Deposits: Non-interest Bearing Demand 48,473 46,478 Interest Bearing Demand 36,848 36,627 Money Market 68,434 62,596 Savings 25,256 24,844 Time 227,195 202,272 --------- --------- Total deposits 406,206 372,817 --------- --------- Short-term borrowings 37,828 37,349 Accrued interest payable 2,737 1,990 Other liabilities 3,069 2,576 Long-term debt 45,343 54,581 --------- --------- Total Liabilities 495,183 469,313 --------- --------- STOCKHOLDERS' EQUITY: Common stock, par value $1 per share; authorized 10,000,000 shares; issued 3,533,340 shares at March 31, 2008 and December 31, 2007 3,533 3,533 Additional paid-in capital 31,107 31,107 Retained earnings 6,859 6,660 Accumulated other comprehensive inc (loss) 519 284 Treasury Stock, at cost (47,084 and 43,706 shares at Mar. 31, 2008 and Dec. 31, 2007) (1,227) (1,140) --------- --------- Total Stockholders' Equity 40,791 40,444 --------- --------- Total Liabilities & Equity 535,974 509,757 ========= ========= The accompanying notes are an integral part of these consolidated financial statements. 2 MID PENN BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited; In thousands, except per share data) FOR THE QUARTER ENDED MARCH 31, ------------------------ 2008 2007 ---------- ---------- INTEREST INCOME: Interest & fees on loans $ 6,777 $ 6,414 Int.-bearing balances 672 626 Treas. & Agency securities 232 260 Municipal securities 345 329 Other securities 51 52 Fed funds sold and repos 0 24 ---------- ---------- Total Int. Income 8,077 7,705 ---------- ---------- INTEREST EXPENSE: Deposits 2,987 2,799 Short-term borrowings 262 199 Long-term borrowings 628 729 ---------- ---------- Total Int. Expense 3,877 3,727 ---------- ---------- Net Int. Income 4,200 3,978 PROVISION FOR LOAN AND LEASE LOSSES 100 75 ---------- ---------- Net Int. Inc. after Prov. for Loan & Lease Losses 4,100 3,903 ---------- ---------- NON-INTEREST INCOME: Trust dept 67 81 Service chgs. on deposits 408 366 Investment securities Gains(losses), net 0 0 Increase in cash surrndr value of life insurance 62 70 Mortgage banking income 39 35 Income from sale of other real estate 0 0 ATM/Debit card income 115 99 Financial Network 40 34 Merchant Services 25 21 Safety deposit rental income 26 23 Other 112 108 ---------- ---------- Total Non-Interest Income 894 837 ---------- ---------- NON-INTEREST EXPENSE: Salaries and benefits 1,817 1,723 Occupancy, net 288 216 Equipment 318 265 PA Bank Shares tax 92 82 Legal and professional expense 175 189 Marketing and advertising expense 78 84 ATM/Debit card processing expense 41 44 Director fees and benefits expense 76 80 Computer expense 138 148 Stationary and supplies 72 62 Trust department expense 11 16 Postage expense 39 43 Leasing department expense 14 12 Meals, travel, and lodging expense 25 23 Donations expense 15 33 Internet banking expense 14 12 Courier expense 30 26 Insurance expense 16 17 Merchant services expense 13 3 Core deposit intangible expense 33 33 Dues and subscriptions expense 17 13 Ongoing education expense 17 15 Service charge expense 22 22 Credit report expense 14 12 Other 69 118 ---------- ---------- Tot. Non-int. Exp 3,444 3,291 ---------- ---------- Income before income tax provision 1,550 1,449 INCOME TAX PROVISION 377 365 ---------- ---------- NET INCOME $ 1,173 $ 1,084 ========== ========== NET INCOME PER SHARE $ 0.34 $ 0.31 ========== ========== DIVIDENDS PER SHARE $ 0.20 $ 0.20 ========== ========== Weighted Average No. of Shares Outstanding 3,488,826 3,508,721 The accompanying notes are an integral part of these consolidated financial statements. 3 MID PENN BANCORP, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited; Dollars in thousands) FOR THE QUARTER ENDED MARCH 31, ------------------ 2008 2007 ------- ------- Operating Activities: Net Income $ 1,173 $ 1,084 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan & lease losses 100 75 Depreciation 210 185 Incr. in cash-surr. value of life insurance -62 -69 Investment securities gains, net 0 0 Amortization 16 33 (Gain) loss on sale/disposal of bank premises and equipment 0 0 Loss (gain) on the sale of foreclosed assets 32 9 Change in deferred income taxes 0 93 Change in accrued interest receivable 173 117 Change in other assets 701 -653 Change in accrued interest payable 747 556 Change in other liabilities 217 257 ------- ------- Net cash provided by operating activities 3,307 1,687 ------- ------- Investing Activities: Net (incr)decr in int-bearing balances -14,231 -322 Net increase in federal funds sold 0 -3,750 Proceeds from sale of securities 0 0 Proceeds from the maturity of secs 8,344 1,948 Purchases of investment securities -9,862 -5 Net increase in loans -12,073 -678 Purchases of bank premises & equip't -318 -566 Proceeds from sale of foreclosed assets 52 124 ------- ------- Net cash used in investing activities -28,088 -3,249 ------- ------- Financing Activities: Net incr. in demand and savings 8,466 8,257 Net incr.(decr.) in time deposits 24,923 7,667 Net incr.(decr.) in short-term borrowings 479 -16,102 Long-term debt repayments -10,033 -32 Proceeds from long-term borrowings 795 0 Cash dividend paid -698 -668 Purchase of treasury stock -87 -299 ------- ------- Net cash provided by(used in) financing activities 23,845 -1,177 ------- ------- Net (decr.)incr. in cash & due from banks -936 -2,739 Cash & due from banks, beg of period 10,599 9,498 ------- ------- Cash & due from banks, end of period 9,663 6,759 ======= ======= Supplemental Disclosures of Cash Flow Information: Interest paid 3,130 3,171 Income taxes paid 0 0 Supplemental Noncash Disclosures: Loan charge-offs 47 84 Transfers to foreclosed assets held for sale 0 0 The accompanying notes are an integral part of these consolidated financial statements. 4 MID PENN BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The consolidated interim financial statements, with the exception of the consolidated balance sheet as of December 31, 2007, are unaudited and have been prepared according to the rules and regulations of the Securities and Exchange Commission with respect to Form 10-Q. The financial information reflects all adjustments (consisting only of normal recurring adjustments), which are, in our opinion, necessary for a fair statement of results for the periods covered. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted according to these rules and regulations. We believe, however, that the disclosures are adequate so that the information is not misleading. You should read these interim financial statements along with the financial statements including the notes included in the Corporation's most recent Form 10-K. 2. Interim statements are subject to possible adjustments in connection with the annual audit of the Corporation's accounts for the full fiscal year. In our opinion, all necessary adjustments have been included so that the interim financial statements are not misleading. 3. The results of operations for the interim periods presented are not necessarily an indicator of the results expected for the full year. 4. Management considers the allowance for loan and lease losses to be adequate at this time. 5. Short-term borrowings as of March 31, 2008, and December 31, 2007, consisted of: (Dollars in thousands) 3/31/08 12/31/07 ------- -------- Federal funds purchased $28,550 $29,600 Repurchase agreements 8,663 7,156 Treasury, tax and loan note 615 593 ------- -------- $37,828 $37,349 ======= ======= Federal funds purchased represent overnight funds. Securities sold under repurchase agreements generally mature between one day and one year. Treasury, tax and loan notes are open-ended interest bearing notes payable to the U.S. Treasury upon call. All tax deposits accepted by the Bank are placed in the Treasury note option account. 6. During the first quarter, Mid Penn Bank ("MPB") entered into one long-term borrowing with the Federal Home Loan Bank of Pittsburgh. It is an amortizing loan for $795,000 with a fixed rate of 3.24%, maturing on March 5, 2013, which was entered into in conjunction with the funding of a specific commercial loan for one of the Bank's borrowers. 7. MPB has an unfunded noncontributory defined benefit retirement plan for directors. The plan provides defined benefits based on years of service. MPB also has other postretirement benefit plans covering full-time employees. These health care and life insurance plans are noncontributory. MPB uses a December 31 measurement date for its plans. 5 MID PENN BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The components of net periodic benefit costs from these benefit plans are as follows: THREE MONTHS ENDED MARCH 31: (IN THOUSANDS) PENSION BENEFITS OTHER BENEFITS 2008 2007 2008 2007 ----- ----- ----- ----- Service cost $ 12 $ 10 $ 6 $ 6 Interest cost 9 8 15 15 Expected return on plan assets 0 0 0 0 Amortization of transition obligation 4 4 0 0 Amortization of prior service cost 0 0 5 7 Amortization of net (gain) loss -1 -2 0 0 ----- ----- ----- ----- Net periodic benefit cost $ 24 $ 20 $ 26 $ 28 ===== ===== ===== ===== 8. Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each of the periods presented, giving retroactive effect to stock dividends. The basic and diluted earnings per share are the same since there are no dilutive shares of securities outstanding. 9. The purpose of reporting comprehensive income (loss) is to report a measure of all changes in the Corporation's equity resulting from economic events other than transactions with stockholders in their capacity as stockholders. For the Corporation, comprehensive income(loss) includes traditional income statement amounts as well as unrealized gains and losses on certain investments in debt and equity securities (i.e. available- for-sale securities). Because unrealized gains and losses are part of comprehensive income (loss), comprehensive income (loss) may vary substantially between reporting periods due to fluctuations in the market prices of securities held. Other comprehensive income also includes a pension component in accordance with Financial Accounting Standards Board No. 158. (IN THOUSANDS) THREE MONTHS ENDED MARCH 31: 2008 2007 -------- -------- Net Income $ 1,173 $ 1,084 -------- -------- Other comprehensive income(loss): Unrealized holding gains (losses) on securities arising during the period 355 -21 Less: reclassification adjs for losses(gains) included in net income 0 0 -------- -------- Net unrealized losses 355 -21 Other comprehensive income related to the booking of benefits liabilities 0 -311 Income tax (provision) benefit related to other comp.income (loss) -120 113 -------- -------- Other comprehensive inc(loss) 235 -219 -------- -------- Comprehensive Income $ 1,408 $ 865 ======== ========== 6 MID PENN BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 10. Effective January 1, 2008, MPB adopted Statement of Financial Accounting Standard No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles in the United States of America and enhances disclosures about fair value measurements. The Bank measures on a recurring basis its available for sale securities portfolio at market value according to SFAS 157. Total available for sale assets were $55,945,000 as of March 31, 2008. These securities, comprising agency and municipal securities, were measured using level 2 inputs. These market values are provided by a third-party securities brokerage firm. Level 2 inputs are inputs other than quoted prices on an active exchange included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include: a. Quoted prices for similar assets or liabilities in active markets; b. Quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers (for example, some brokered markets), or in which little information is released publicly (for example, a principal-to principal market); c. Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates); d. Inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Level 1 inputs are those that are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 3 inputs are unobservable inputs based on internal models due to lack of comparable inputs at either level 1 or 2. The Bank did not have any assets or liabilities whose fair values are measured using level 1 or level 3 inputs. On January 1, 2008, the Company adopted SFAS No. 159, THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES. SFAS 159 allows companies to elect to follow fair value accounting for certain financial assets and liabilities in an effort to mitigate volatility in earnings without having to apply complex hedge accounting provisions. The Corporation did not elect the fair value option for any of its financial instruments as of March 31, 2008; and therefore, the adoption of this statement had no effect on the Corporation's financial statements. On January 1, 2008, the Company adopted Emerging Issues Task Force 06-4, ACCOUNTING FOR DEFERRED COMPENSATION AND POSTRETIREMENT BENEFIT ASPECTS OF ENDORSEMENT SPLIT-DOLLAR LIFE INSURANCE ARRANGEMENTS (EITF 06-4). In accordance with the EITF, the Corporation recorded a liability of approximately $276,000 and adjusted beginning retained earnings as of January 1, 2008 by approximately $276,000. 7 MID PENN BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 11. The Corporation adopted FASB Interpretation No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES, an interpretation of FASB Statement No. 109 (FIN48) during 2007 and has evaluated its material tax positions as of March 31, 2008. Under the "more-likely-than-not" threshold guidelines, the Corporation believes no significant uncertain tax positions exist, either individually or in the aggregate, that would give rise to the non-recognition of an existing tax benefit. In the event an adverse tax position is determined to exist, penalty and interest will be accrued, in accordance with the Internal Revenue Service guidelines, and recorded as a component of other non-interest expense in the Corporation's consolidated statements of income. As of March 31, 2008, there were no unrecognized tax benefits that, if recognized, would significantly affect the Corporation's effective tax rate. Also, as of March 31, 2008, there were no penalties and interest recognized in the consolidated statement of income as a result of FIN 48, nor does the Corporation foresee a change in its material tax positions that would give rise to the non-recognition of an existing tax benefit during the near future. MID PENN BANCORP, INC. MILLERSBURG, PENNSYLVANIA ITEM 2: MANAGEMENT'S DISCUSSION OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS Special Cautionary Notice Regarding Forward-looking Statements Certain of the matters discussed in this document and in documents incorporated by reference herein, including matters discussed under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations," may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words "expect," "anticipate," "intend," "plan," "believe," "estimate," and similar expressions are intended to identify such forward-looking statements. The Corporation's actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation: o The effects of future economic conditions on the Corporation and the its customers; o The costs and effects of litigation and of unexpected or adverse outcomes in such litigation; o Governmental monetary and fiscal policies, as well as legislative and regulatory changes; o The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; o The risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks; o 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 MPB's 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; o Technological changes; o Acquisitions and integration of acquired businesses; o The failure of assumptions underlying the establishment of reserves for loan and lease losses and estimations of values of collateral and various financial assets and liabilities; and o Acts of war or terrorism. 8 The following is Management's Discussion of Consolidated Financial Condition as of March 31, 2008, compared to year-end 2007 and the Results of Operations for the first quarter of 2008 compared to the same period in 2007. CONSOLIDATED FINANCIAL CONDITION Total assets as of March 31, 2008, were $535,974,000 compared to $509,757,000 as of December 31, 2007, an increase of 5.1% during the first quarter. Strong loan demand contributed $11,973,000 in growth of net loans. Management also increased the banks investment in interest-bearing balances (short-term, jumbo certificates of deposit at other financial institutions) by $14,231,000 ahead of the decreases in short-term interest rates. The growth in assets was funded by an increase in total deposits of $33,389,000 during the quarter. Deposit growth was spurred with a special rate, thirteen-month term, certificate of deposit offer during the quarter. Consequently, time deposits grew by $24,923,000 during the quarter. Of this growth, an increase of $9.7 million represents the time deposits of one municipality. In addition to the growth in time deposits, all categories of deposits increased in balances during the quarter. Money market balances increased by $5.8 million and demand deposits increased by nearly $2 million. The deposit growth also allowed the Bank to reduce long-term borrowings by not having to replace a $10 million FHLB borrowing that came due during the quarter. Short-term borrowings remain at a high level as the Bank is able to take advantage of decreasing short-term interest rates. Management plans on replacing some of the short-term borrowings with long-term borrowings to ladder the maturities. As of March 31, 2008, the Bank's capital ratios are well in excess of the minimum and well-capitalized guidelines. In September of 2005, Mid Penn Bancorp's Board of Directors approved a Stock Repurchase Program under which the Corporation could buy back up to 250,000 shares of Mid Penn Bancorp common stock. To date, 28,028 shares have been repurchased at an average price of $24.56 per share. During the first quarter of 2008, 3,378 shares were repurchased at an average price of $25.47. RESULTS OF OPERATIONS Net income for the first quarter of 2008 was $1,173,000, compared with $1,084,000 earned in the same quarter of 2007, an increase of 8.2%. The increase is primarily attributable to the larger base of earning assets during the first quarter of 2008, which allowed MPB to grow net interest income. Net income per share for the first quarter of 2008 and 2007 was $.34 and $.31, respectively, or an increase of 9.7%. Net income as a percentage of stockholders' equity, also known as return on equity, (ROE), was 11.6% on an annualized basis for the first quarter of 2008 as compared to 11.1% for the same period in 2007. Net interest income increased due to a larger base of earning assets as compared to the first quarter of 2007. Net interest income of $4,200,000 for the quarter ended March 31, 2008, increased by 5.6% compared to the $3,978,000 earned in the same quarter of 2007. 9 The following tables illustrate MPB's net interest margin on a taxable equivalent basis for both the year ended 2007 and the three months ended March 31, 2008, annualized. The margin for 2007 was 3.68%. The margin has decreased slightly to 3.62% for the quarter ended March 31, 2008. A major factor in this decrease was the deposit special during the quarter; however, this deposit special was very effective at bringing in deposits to the bank including funds that had moved to a competitor, in the midst of a merger, offering aggressive rates during 2007. TABLE 1: AVERAGE BALANCES, EFFECTIVE INTEREST DIFFERENTIAL AND INTEREST YIELDS INCOME AND RATES ON A TAXABLE EQUIVALENT BASIS FOR THREE MONTHS ENDED MARCH 31, 2008
ANNUALIZED (DOLLARS IN THOUSANDS) AVERAGE INTEREST INCOME AVERAGE RATES BALANCE /EXPENSE EARNED/PAID ----------- ----------- ----------- ASSETS: Interest Bearing Balances $ 54,495 2,692 4.94% Investment Securities: Taxable 25,402 1,132 4.46% Tax-Exempt 30,253 2,092 6.92% ----------- Total Investment Securities 55,655 Federal Funds Sold 0 0 0.00% Loans, Net 379,342 27,336 7.21% ----------- ---------- Total Earning Assets 489,492 33,252 6.79% ----------- ---------- Cash and Due from Banks 8,024 Other Assets 25,673 ----------- Total Assets $ 523,189 =========== LIABILITIES & STOCKHOLDERS' EQUITY: Interest Bearing Deposits: NOW $ 36,240 152 0.42% Money Market 65,687 1,620 2.47% Savings 25,148 68 0.27% Time 224,203 10,108 4.51% Short-term Borrowings 32,177 1,048 3.26% Long-term Debt 48,493 2,512 5.18% ----------- ---------- Total Interest Bearing Liabilities 431,948 15,508 3.59% ---------- Demand Deposits 45,394 Other Liabilities 5,638 Stockholders' Equity 40,209 ----------- Total Liabilities and Stockholders' Equity $ 523,189 =========== Net Interest Income (on a taxable equivalent basis) $ 17,744 ========== Net Yield on Interest Earning Assets: Total Yield on Earning Assets 6.79% Rate on Supporting Liabilities 3.17% Average Interest Spread 3.20% Net Interest Margin 3.62%
10 TABLE 1: AVERAGE BALANCES, EFFECTIVE INTEREST DIFFERENTIAL AND INTEREST YIELDS INCOME AND RATES ON A TAXABLE EQUIVALENT BASIS FOR TWELVE MONTHS ENDED DECEMBER 31, 2007
ANNUALIZED (DOLLARS IN THOUSANDS) AVERAGE INTEREST INCOME AVERAGE RATES BALANCE /EXPENSE EARNED/PAID ----------- ---------- ------------- ASSETS: Interest Bearing Balances $ 46,900 2,546 5.43% Investment Securities: Taxable 25,043 1,150 4.59% Tax-Exempt 29,726 2,062 6.94% ----------- Total Investment Securities 54,769 Federal Funds Sold 624 33 5.29% Loans, Net 361,324 26,592 7.36% ----------- ----------- Total Earning Assets 463,617 32,383 6.99% ----------- Cash and Due from Banks 7,559 Other Assets 25,012 ----------- Total Assets $ 496,188 =========== LIABILITIES & STOCKHOLDERS' EQUITY: Interest Bearing Deposits: NOW $ 35,048 144 0.41% Money Market 63,927 2,208 3.45% Savings 25,513 72 0.28% Time 203,671 9,006 4.42% Short-term Borrowings 22,528 1,049 4.66% Long-term Debt 56,908 2,860 5.03% ----------- ----------- Total Interest Bearing Liabilities 407,595 15,339 3.76% ----------- Demand Deposits 44,021 Other Liabilities 5,734 Stockholders' Equity 38,838 ----------- Total Liabilities and Stockholders' Equity $ 496,188 =========== Net Interest Income (on a taxable equivalent basis) $ 17,044 =========== Net Yield on Interest Earning Assets: Total Yield on Earning Assets 6.99% Rate on Supporting Liabilities 3.31% Average Interest Spread 3.23% Net Interest Margin 3.68%
11 During the first quarter of 2008, MPB analyzed interest rate risk using the Profitstar Asset-Liability Management Model. Using the computerized model, Management reviews interest rate risk on a periodic basis. This analysis includes an earnings scenario whereby interest rates are increased by 200 basis points (2 percentage points) and another whereby they are decreased by 200 basis points. At March 31, 2008, these scenarios were within the policy limits of +/- 15% change in net interest income for the next twelve months; however, actual results could vary significantly from the calculations prepared by management. Based on Management's analysis of the loan portfolio, the Bank recorded a $100,000 provision for possible loan and lease losses during the first quarter of 2008, compared to a provision of $75,000 made during the first quarter of 2007. The provision was slightly higher in 2008 due to greater growth in the loan portfolio compared with the same quarter of 2007. On a quarterly basis, senior management reviews potentially unsound loans taking into consideration judgments regarding risk of loss, economic conditions, trends and other factors in determining a reasonable allowance at the end of the period. A portion of the allowance for loan and lease losses is based on applying historical loss ratios to the existing loan portfolio. Non-interest income amounted to $894,000 for the first quarter of 2008 compared to $837,000 earned during the same quarter of 2007. A significant contribution to non-interest income continues to be insufficient fund (NSF) fee income. NSF fee income contributed approximately $336,000 during the first quarter of 2008 and $298,000 during the first quarter of 2007. Another factor in the increase in non-interest income is the continued increase in ATM/debit card usage, which generated $115,000 in gross income during the quarter compared to $99,000 during the same quarter of 2007. Non-interest expense amounted to $3,444,000 for the first quarter of 2008 compared to $3,291,000 incurred during the same quarter of 2007, an increase of 4.6%. A major increase in non-interest expense was the $94,000 increase in salary and benefits expense. One factor contributing to this increase is the addition of a full-service office in Camp Hill, Cumberland County, Pennsylvania, opened in September of 2007. In addition, expenses related to occupancy, including network expenses, increased by approximately $125,000 compared to the first quarter of 2007. This increase reflects higher depreciation, taxes and utility (particularly heating) costs as well as the addition of the Bank's Camp Hill office. The Bank is also involved in replacing its main-frame computer system and augmenting its core processing software to increase technological capabilities to both internal users and ultimately expanding delivery options for Bank customers. Computer expense amounted to $138,000 during the quarter. The income tax provision for the quarter reflects a slightly lower effective tax rate than the first quarter of 2007 due to a higher level of tax-exempt securities, loans and leases in 2008. LIQUIDITY MPB's objective is to maintain adequate liquidity while managing return and interest rate risk. Adequate liquidity provides resources for credit needs of borrowers, for depositor withdrawals, and for funding corporate operations. Sources of liquidity include interest-bearing balances, maturing investment securities, borrowings, payments received on loans, and increases in deposit liabilities. Funds generated from operations were a major source of funds during the quarter. Another significant source of funds came from the net increase in deposits during the first quarter, which generated over $33.3 million in funds. The majority of this increase is attributable to a promotional deposit offer during the quarter. These funds were used to fund the net increase in loans of $12 million, the net increase in interest-bearing balances of $14 million, and to pay off a matured borrowing of $10 million. CREDIT RISK AND ALLOWANCE FOR LOAN AND LEASE LOSSES Total non-performing assets were $7,513,000, representing 1.40% of total assets at March 31, 2008, compared to $7,343,000, or 1.44% of total assets, at December 31, 2007. These levels of non-performing assets are high for MPB and reflect the general economic weakness. MPB did not participate in any subprime mortgage lending. 12 The allowance for loan losses at March 31, 2008, was $4,867,000 or 1.25% of loans, net of unearned interest, as compared to $4,790,000 or 1.27% of loans, net of unearned interest, at December 31, 2007. While total non-performing loans increased slightly during the quarter, the financial position of one large commercial borrower improved, allowing the Bank to reduce its expected exposure in this relationship. The upgrading of this particular relationship contributed to the ..02% decrease in the allowance-to-loan ratio. Based upon the ongoing analysis of MPB's loan portfolio by the loan review department, the latest quarterly analysis of potentially unsound loans and non-performing assets, Management considers the Allowance for Loan and Lease Losses to be adequate to absorb any reasonably foreseeable loan and lease losses. THREE MOS. YEAR ENDED ENDED MAR. 31, DEC. 31, 2008 2007 --------- --------- Non-Performing Assets: Non-accrual loans 5,396 4,317 Past due 90 days or more 1,672 2,439 Restructured loans 0 0 --------- --------- Total non-performing loans 7,068 6,756 Other real estate 445 587 --------- --------- Total 7,513 7,343 ========= ========= Percentage of total loans outstanding 1.93% 1.94% Percentage of total assets 1.40% 1.44% Analysis of the Allowance for Loan Losses: Balance beginning of period 4,790 4,187 Loans charged off: Commercial real estate, construction and land development 0 0 Commercial, industrial and agricultural 0 100 Real estate - residential mortgage 0 0 Consumer 47 231 Leases 0 129 --------- --------- Total loans charged off 47 460 --------- --------- Recoveries of loans previously charged off: Commercial real estate, construction and land development 0 0 Commercial, industrial and agricultural 13 5 Real estate - residential mortgage 0 0 Consumer 11 49 Leases 0 84 --------- --------- Total recoveries 24 138 --------- --------- Net (charge-offs) recoveries -23 -322 --------- --------- Current period provision for loan losses 100 925 --------- --------- Balance end of period 4,867 4,790 ========= ========= 13 RECENT ACCOUNTING PRONOUNCEMENTS In September 2006, the FASB issued SFAS No. 157, FAIR VALUE MEASUREMENTS ("SFAS No. 157"), to establish a consistent framework for measuring fair value and expand disclosures on fair value measurements. The provisions of SFAS No. 157 are effective beginning in 2008 and affect the Company's disclosures of information regarding fair values of financial instruments, but do not have a material effect on the Company's financial statements. The disclosures required by SFAS No. 157 are presented in Note 10 to the consolidated financial statements. In February 2007, FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES, INCLUDING AN AMENDMENT OF FASB STATEMENT NO. 115 ("SFAS No. 159"). SFASS No. 159 permits entities to choose to measure many financial instruments at fair value that are not required to be measured at fair value. It also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 is effective as of the beginning of an entity's first fiscal year that begins after November 15, 2007 (the Company's 2008 fiscal year). The Company has not elected to measure any financial instruments at fair value (other than instruments that were measured at fair value prior to SFAS No. 159), and therefore SFAS No. 159 has not affected the Company's financial statements. ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK In the normal course of conducting business activities, the Corporation is exposed to market risk, principally interest risk. Interest risk arises from market driven fluctuations in interest rates that affect cash flows, income, expense and values of financial instruments. The Asset/Liability Committee, using policies approved by the Board of Directors, is responsible for managing the rate sensitivity position. No material changes in the market risk strategy occurred during the current period. No material changes have been noted in the Corporation's equity value at risk. A detailed discussion of market risk is provided in the Form 10-K for the year ended December 31, 2007. ITEM 4: CONTROLS AND PROCEDURES: Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this report, the Corporation updated its evaluation, under the supervision and with the participation of the Corporation's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the corporation's disclosure controls and procedures pursuant to the Securities Exchange Act of 1934 Rule 13a-15e. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Corporation's disclosure controls and procedures are effective in timely alerting them to material information relating to the Corporation (including its consolidated subsidiaries) required to be included in our periodic SEC filings. Changes in Internal Controls Over Financial Reporting There was no change in the Corporation's internal controls or, to its knowledge, in other factors that have materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 14 MID PENN BANCORP, INC. PART II - OTHER INFORMATION: Item 1. Legal Proceedings - Management is not aware of any litigation that would have a material adverse effect on the consolidated financial position of the Corporation. There are no proceedings pending other than ordinary routine litigation incident to the business of the Corporation. In addition, management does not know of any material proceedings contemplated by governmental authorities against the Corporation or any of its properties. Item 1A. Risk Factors - There are no material changes from the risk factors as previously disclosed in the Form 10-K for the year ended December 31, 2007. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds - In September of 2005, Mid Penn Bancorp's Board of Directors approved a Stock Repurchase Program under which the Corporation could buy back up to 250,000 shares of Mid Penn Bancorp common stock. Through March 31, 2008, 28,028 shares have been repurchased at an average price of $24.56 per share. During the first quarter of 2008, 3,378 shares were repurchased at an average price of $25.47. Issuer Purchases of Equity Securities During the Quarter:
- ------------------------------------------------------------------------------------------ TOTAL CUMULATIVE PERIOD NUMBER OF NUMBER OF SHARES MAXIMUM NUMBER OF SHARES AVERAGE PRICE PURCHASED AS SHARES THAT MAY YET BE PERIOD PURCHASED PAID PER SHARE PART OF PLAN PURCHASED UNDER PLAN - ------------------------------------------------------------------------------------------ January-08 217 $26.90 24,867 225,133 - ------------------------------------------------------------------------------------------ February-08 260 $25.07 25,127 224,873 - ------------------------------------------------------------------------------------------ March-08 2,901 $25.40 28,028 221,972 - ------------------------------------------------------------------------------------------ Total 3,378 $25.47 28,028 221,972 - ------------------------------------------------------------------------------------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NOTHING TO REPORT ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NOTHING TO REPORT ITEM 5. OTHER INFORMATION - NOTHING TO REPORT 15 ITEM 6. EXHIBITS - 3(i) The Registrant's Articles of Incorporation. (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the SEC on March 10, 2008.) 3(ii) The Registrant's By-laws. (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the SEC on March 10, 2008.) 10.1 Mid Penn Bank's Profit Sharing Retirement Plan. (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the SEC on March 10, 2008.) 10.2 Mid Penn Bank's Employee Stock Ownership Plan. (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the SEC on March 10, 2008.) 10.3 The Registrant's Dividend Reinvestment Plan, as amended and restated. (Incorporated by reference to Registrant's Registration Statement on Form S-3, filed with the SEC on October 12, 2005.) 10.4 Salary Continuation Agreement between Mid Penn Bank and Alan W. Dakey. (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 28, 2003.) 10.5 Split Dollar Agreement between Mid Penn Bank and Eugene F. Shaffer (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2005.) 10.6 Death Benefit Plan and Agreement between Mid Penn Bank and the Trustee of the Eugene F. Shaffer Irrevocable Trust (Incorporated by reference to Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2005.) 10.7 Executive Employment Agreement between Mid Penn Bank and Alan W. Dakey dated as of August 31, 2007. (Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2007.) 10.8 Key Executive Management Change of Control between Mid Penn Bancorp, Inc. and Kevin W. Laudenslager dated as of April 1, 2008. (Incorporated by reference to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 4, 2008.) 10.9 Revised Directors' Retirement Plan 11.1 Statement regarding the computation of Per Share Earnings (Included in body of 10-Q) 31.1 Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer. 31.2 Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer. 32.1 Chief Executive Officer's ss.1350 Certification. 32.2 Chief Financial Officer's ss.1350 Certification 16 SIGNITURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MID PENN BANCORP, INC. Registrant /s/ Alan W. Dakey /s/ Kevin W. Laudenslager By: Alan W. Dakey By: Kevin W. Laudenslager President & CEO Treasurer Date: May 5, 2008 Date: May 5, 2008 EX-10.9 2 exhibit109.txt MID PENN BANK DIRECTOR RETIREMENT PLAN 1. DECLARATION OF PURPOSE Mid Penn Bank ("Bank"), a Pennsylvania banking company existing under the laws of the Commonwealth of Pennsylvania, with its primary office at 349 Union Street, Millersburg, Pennsylvania, desires to provide an annual retirement bonus to qualified retired members of the Board of Directors of Bank ("Board") pursuant to this Director Retirement Plan ("Plan"). The purpose of this Plan is intended to reward retired Directors for their years of service to Bank. 2. ELIGIBILITY Retired Directors that terminated service with the Board and have completed at least five (5) years of service on the Board are eligible to receive benefits under the Plan; provided, however, that no benefits shall be payable to any former Director whose service on the Board is terminated, or who fails to be renominated to the Board at the expiration of the Director's term, because of the Director's gross negligence or neglect of duties, commission of a felony or a misdemeanor involving moral turpitude, or fraud, disloyalty, dishonesty or willful violation of any law or significant policy of Bank committed in connection with the Director's service on the Board and resulting in an adverse financial impact on Bank. Eligibility determinations shall be made in the sole discretion of Bank and shall be binding upon the affected former Director. 3. CHANGE IN CONTROL BENEFIT Notwithstanding anything contained in this Plan to the contrary, if a Director terminates service with the Board within ninety (90) days after a Change in Control, benefits shall be payable as otherwise provided under this Plan, though without regard to whether the Director has completed five (5) years of service. For purposes of this Plan, a Change in Control (other than one occurring by reason of an acquisition of Bank by the Director) shall be deemed to have occurred if the Board certifies on an objective basis that one of the following has occurred: (a) a sale or other transfer of ownership of all or substantially all (50% or more of the total gross fair market value) of the assets of Bank to any individual, corporation, partnership, trust, or other entity or organization (a "Person") or group of Persons acting in concert as a partnership or other group, other than a Person controlling, controlled by, or under common control with Bank; (b) any Person or group of Persons acting in concert as a partnership or other group, other than a Person controlling, controlled by, or under common control with Bank, acquires ownership of stock in Bank, that together with stock held by such Person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of Bank, provided such Person or group did not own more than 50 percent of the total fair market value or total voting power of the stock of Bank prior to such acquisition; or (c) the replacement of a majority of members of the Board of Directors of Mid Penn Bancorp, Inc. over any period of one year or less by directors whose appointment or election is not endorsed by a majority of the members of such Board of Directors prior to the date of the appointment or election. 4. DISABILITY BENEFIT Notwithstanding anything contained in this Plan to the contrary, if a Director terminates service with the Board as a result of the Director's Disability, benefits shall be payable as otherwise provided under this Plan, though without regard to whether the Director has completed five (5) years of service. For purposes of this Plan, Disability shall mean that the Director is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months. 5. BENEFIT PAYMENTS Plan benefits will be paid in cash at the end of each calendar quarter commencing with the last day of the first full calendar quarter following the date the Director terminates service on the Board. Benefit payments shall continue for the life of the Director and terminate at death; provided, however, that benefit payments shall terminate prior to death once the Director has received sixty (60) quarterly payments. No payment shall be made for any portion of the quarter in which benefit payments hereunder are terminated due to the Director's death. 6. COMPUTATION OF BENEFIT Benefit amounts are redetermined annually effective as of the first day of the calendar year. The annual benefit amount shall be determined by multiplying the base retirement bonus, as described below, for the Director's position by the number of full years the Director served in the position. A full year for this purpose shall be deemed any period of twelve (12) consecutive months whether or not coincident with a calendar year. Benefits shall be credited only for full years of service on the Board, and for any such year that a Director serves a portion as Chairman and a portion as a Director (though not Chairman), credit shall be based for such entire year on the amount in effect for a Director that is not Chairman of the Board. The base retirement bonus figures shall be as follows: (a) Chairman of the Board $533.35 (b) All other Directors $266.68 7. INFLATIONARY ADJUSTMENT At the conclusion of the 2007 calendar year, and every year thereafter, the base retirement bonus amounts set forth in Section 6 hereof (as adjusted pursuant to this Section 7) in effect for the then concluding year shall be adjusted effective the beginning of the succeeding calendar year by the positive percentage change, if any, in the Consumer Price Index - City Average Percentage Change published by the U.S. Department of Labor Bureau of Labor Statistics for the twelve-month period ending December 31 of the concluding year for the Philadelphia-Wilmington-Atlantic City, PA-DE-NJ-MD, area. 8. UNFUNDED ARRANGEMENT An eligible Director shall be an unsecured creditor of Bank for purposes of the payment of benefits under the Plan. Benefits hereunder represent the mere promise by Bank to pay such benefits. Rights to Plan benefits are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any insurance policy on a Director's life obtained by Bank shall be owned by Bank and shall confer no preferred or secured claim status to such policy or policy benefits on any Director or beneficiary. 9. REORGANIZATION Bank shall not merge or consolidate into or with another company, or reorganize, or sell substantially all of its assets to another company, firm, or person unless such succeeding or continuing company, firm, or person agrees to assume and discharge the obligations of Bank under this Plan. 10. TERMINATION OF PLAN This Plan may be terminated at any time in the sole discretion of Bank; provided, however, that any such Plan termination will be ineffective with respect to any Director (i) that has become eligible to receive benefits hereunder as of the date such Plan termination is approved or (ii) who is serving on the Board at the time such Plan termination is approved. 11. GOVERNING LAW The Plan and all rights hereunder shall be governed by the laws of the Commonwealth of Pennsylvania, except to the extent preempted by the laws of the United States of America. The provisions of this Plan shall be construed consistent with Section 409A of the Internal Revenue Code and all applicable guidance thereunder so as not to result in the inclusion in the Director's income of any benefit under this Agreement by reason of the application of such section. [REST OF PAGE INTENTIONALLY LEFT BLANK] 12. EFFECTIVE DATE/STATUS OF PRIOR PLAN This Plan shall be effective January 1, 2008 and replaces in its entirety as of such date the Retirement Bonus Plan for the Board of Directors of Mid Penn Bank adopted by Bank in 1995 ("Prior Plan"). All payments under the Prior Plan shall terminate upon this Plan's effective date. Notwithstanding anything contained in this Plan to the contrary, however, any Director having attained eligibility for benefits under the Prior Plan will receive benefit payments without regard to the maximum benefit limitation of sixty (60) quarterly payments set forth in Section 5 hereof, provided such Director's service on the Board terminated prior to this Plan's effective date. Dated this 28th day of November, 2007. MID PENN BANK By: /s/ Alan W. Dakey ------------------------------------------- Signature Alan W. Dakey ------------------------------------------- Print Name President and CEO ------------------------------------------- Title /s/ Cindy L Wetzel ------------------------------------------- Secretary :204933 EX-31.1 3 exhibit311.txt EXHIBIT 31.1 CERTIFICATION I, ALAN W. DAKEY, PRESIDENT AND CEO, certify, that: 1. I have reviewed this quarterly report on Form 10-Q of Mid Penn Bancorp. 2. Based on my knowledge, the quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report. 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of the internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 5, 2008 By: /s/ Alan W. Dakey ----------------------- Alan W. Dakey Pres. And CEO EX-31.2 4 exhibit312.txt EXHIBIT 31.2 CERTIFICATION I, KEVIN W. LAUDENSLAGER, TREASURER, certify, that: 1. I have reviewed this quarterly report on Form 10-Q of Mid Penn Bancorp. 2. Based on my knowledge, the quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report. 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): (a) all significant deficiencies in the design or operation of the internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 5, 2008 By: /s/ Kevin W. Laudenslager ------------------------------------ Kevin W. Laudenslager Treasurer EX-32.1 5 exhibit321.txt EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADDED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of Mid Penn Bancorp (the "Company") for the period ended March 31, 2008, as filed with the Securities and Exchange Commission (the "Report"), I, ALAN W. DAKEY, PRES. AND CEO, of the Company, certify, pursuant to 18 U.S.C. ss.1350, as added by ss. 906 of the Sarbanes-Oxley Act of 2002, thAT: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. Date: May 5, 2008 By: /s/ Alan W.Dakey --------------------------- Alan W. Dakey Pres. And CEO EX-32.2 6 exhibit322.txt EXHIBIT 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADDED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report on Form 10-Q of Mid Penn Bancorp (the "Company") for the period ended March 31, 2008, as filed with the Securities and Exchange Commission (the "Report"), I, KEVIN W. LAUDENSLAGER, TREASURER, of the Company, certify, pursuant to 18 U.S.C. ss.1350, as added by ss. 906 of the Sarbanes-Oxley Act of 2002, thAT: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report. Date: May 5, 2008 By: /s/ Kevin W. Laudenslager ------------------------------------- Kevin W. Laudenslager Treasurer -----END PRIVACY-ENHANCED MESSAGE-----