10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-13677

MID PENN BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Pennsylvania	25-1666413
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)
349 Union Street Millersburg, Pennsylvania	17061
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code 717.692.2133

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.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One).

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  x

As of August 14, 2012, the registrant had 3,487,130 shares of common stock outstanding.

Index

PART I – FINANCIAL INFORMATION		2
Item 1 – Financial Statements		2
	Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011 (Unaudited)	2
	Consolidated Statements of Operations for the Three and Six Months Ended June  30, 2012 and June 30, 2011 (Unaudited)	3
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June  30, 2012 and June 30, 2011 (Unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June  30, 2012 and June 30, 2011 (Unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and June  30, 2011 (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item  2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3 – Quantitative and Qualitative Disclosures about Market Risk		38
Item 4 – Controls and Procedures		38
PART II – OTHER INFORMATION		38
Item 1 – Legal Proceedings		38
Item 1A – Risk Factors		38
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 3 – Defaults upon Senior Securities		38
Item 4 – Mine Safety Disclosures		38
Item 5 – Other Information		38
Item 6 – Exhibits		39
Signatures		40

Unless the context otherwise requires, the terms “Mid Penn”, “we”, “us”, and “our” refer to Mid Penn Bancorp, Inc. and its consolidated subsidiaries.

1

MID PENN BANCORP, INC. Consolidated Balance Sheets (Unaudited)

PART I – FINANCIAL INFORMATION

ITEM 1 – Financial Statements

(Dollars in thousands, except share data)	June 30, 2012			December 31, 2011
ASSETS
Cash and due from banks	$	9,070		$	9,847
Interest-bearing balances with other financial institutions		1,146			1,555
Federal funds sold		—			6,439
Total cash and cash equivalents		10,216			17,841
Interest-bearing time deposits with other financial institutions		24,848			27,477
Available for sale investment securities		148,107			159,043
Loans and leases, net of unearned interest		485,982			482,717
Less: Allowance for loan and lease losses		(6,585	)		(6,772	)
Net loans and leases		479,397			475,945
Bank premises and equipment, net		13,187			13,324
Restricted investment in bank stocks		2,817			3,120
Foreclosed assets held for sale		1,537			931
Accrued interest receivable		2,980			3,067
Deferred income taxes		2,053			2,439
Goodwill		1,016			1,016
Core deposit and other intangibles, net		269			274
Cash surrender value of life insurance		8,020			7,896
Other assets		2,487			3,010
Total Assets	$	696,934		$	715,383
LIABILITIES & SHAREHOLDERS’ EQUITY
Deposits:
Noninterest bearing demand	$	47,354		$	73,261
Interest bearing demand		133,675			59,403
Money Market		221,694			271,521
Savings		28,889			27,978
Time		178,802			201,892
Total Deposits		610,414			634,055
Short-term borrowings		3,445			—
Long-term debt		22,606			22,701
Accrued interest payable		1,102			1,064
Other liabilities		3,636			4,111
Total Liabilities		641,203			661,931
Shareholders’ Equity:
Preferred stock, par value $1,000; authorized 10,000,000 shares; 5% cumulative dividend; 10,000,000 shares issued and outstanding at June 30, 2012 and December 31, 2011		10,000			10,000
Common stock, par value $1 per share; 10,000,000 shares authorized; 3,487,130 shares issued and outstanding at June 30, 2012 and 3,484,509 shares issued and outstanding at December 31, 2011		3,487			3,484
Additional paid-in capital		29,848			29,830
Retained earnings		10,118			8,222
Accumulated other comprehensive income		2,278			1,916
Total Shareholders’ Equity		55,731			53,452
Total Liabilities and Shareholders’ Equity	$	696,934		$	715,383

The accompanying notes are an integral part of these consolidated financial statements.

2

MID PENN BANCORP, INC. Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
INTEREST INCOME
Interest & fees on loans and leases	$	7,085	$	7,284		$	13,876	$	14,019
Interest on interest-bearing time deposits with financial institutions		60		155			125		317
Interest and dividends on investment securities:
U.S. Treasury and government agencies		329		325			765		547
State and political subdivision obligations, tax-exempt		404		302			813		625
Other securities		5		3			10		6
Interest on federal funds sold and securities purchased under agreements to resell		2		6			6		14
Total Interest Income		7,885		8,075			15,595		15,528
INTEREST EXPENSE
Interest on deposits		1,618		2,241			3,407		4,436
Interest on short-term borrowings		1		1			1		3
Interest on long-term debt		243		243			487		516
Total Interest Expense		1,862		2,485			3,895		4,955
Net Interest Income		6,023		5,590			11,700		10,573
PROVISION FOR LOAN AND LEASE LOSSES		225		550			525		750
Net Interest Income After Provision for Loan and Lease Losses		5,798		5,040			11,175		9,823
NONINTEREST INCOME
Income from fiduciary activities		189		115			301		210
Service charges on deposits		136		189			265		372
Net gain on sales of investment securities		10		—			26		—
Earnings from cash surrender value of life insurance		62		65			124		130
Mortgage banking income		137		80			259		203
Other income		397		256			694		548
Total Noninterest Income		931		705			1,669		1,463
NONINTEREST EXPENSE
Salaries and employee benefits		2,619		2,401			5,215		4,602
Occupancy expense, net		257		244			535		552
Equipment expense		286		318			580		662
Pennsylvania Bank Shares tax expense		128		121			259		242
FDIC Assessment		302		217			603		531
Legal and professional fees		138		141			245		228
Director fees and benefits expense		88		72			135		145
Marketing and advertising expense		128		95			197		158
Computer expense		161		163			323		329
Telephone expense		103		92			210		186
Loss (gain) on sale/write-down of foreclosed assets		50		(31	)		58		(59	)
Intangible amortization		15		17			31		33
Loan collection costs		39		50			148		91
Other expenses		633		508			1,146		1,008
Total Noninterest Expense		4,947		4,408			9,685		8,708
INCOME BEFORE PROVISION FOR INCOME TAXES		1,782		1,337			3,159		2,578
Provision for income taxes		422		278			665		519
NET INCOME		1,360		1,059			2,494		2,059
Preferred stock dividends and discount accretion		129		129			257		257
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	1,231	$	930		$	2,237	$	1,802
PER COMMON SHARE DATA:
Basic Earnings Per Common Share	$	0.35	$	0.27		$	0.64	$	0.52
Diluted Earnings Per Common Share	$	0.35	$	0.27		$	0.64	$	0.52
Cash Dividends	$	0.05	$	0.05		$	0.10	$	0.10

The accompanying notes are an integral part of these consolidated financial statements.

3

MID PENN BANCORP, INC. Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands)	Three Months Ended June 30,
	2012			2011
Net income	$	1,360		$	1,059
Other comprehensive income:
Unrealized gains arising during the period on available for sale securities, net of income taxes of $149 and $620, respectively		289			1,205
Reclassification adjustment for net gain on sales of available for sale securities included in net income, net of income taxes of ($4) and $0, respectively		(6	)		—
Change in defined benefit plans, net of income taxes of $10 and $1, respectively		20			3
Total other comprehensive income		303			1,208
Total comprehensive income	$	1,663		$	2,267
(Dollars in thousands)	Six Months Ended June 30,
	2012			2011
Net income	$	2,494		$	2,059
Other comprehensive income:
Unrealized gains arising during the period on available for sale securities, net of income taxes of $196 and $722, respectively		381			1,402
Reclassification adjustment for net gain on sales of available for sale securities included in net income, net of income taxes of ($9) and $0, respectively		(17	)		—
Change in defined benefit plans, net of income taxes of ($1) and $2, respectively		(2	)		4
Total other comprehensive income		362			1,406
Total comprehensive income	$	2,856		$	3,465

The accompanying notes are an integral part of these consolidated financial statements.

4

MID PENN BANCORP, INC. Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2012 AND 2011
(Dollars in thousands)	Preferred Stock		Common Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Total Shareholders’ Equity
Balance, December 31, 2011	$	10,000	$	3,484	$	29,830		$	8,222		$	1,916	$	53,452
Net income		—		—		—			2,494			—		2,494
Total other comprehensive income, net of taxes		—		—		—			—			362		362
Cash dividends		—		—		—			(348	)		—		(348	)
Employee Stock Purchase Plan		—		3		25			—			—		28
Preferred dividends		—		—		—			(250	)		—		(250	)
Amortization of warrant cost		—		—		(7	)		—			—		(7	)
Balance, June 30, 2012	$	10,000	$	3,487	$	29,848		$	10,118		$	2,278	$	55,731
Balance, December 31, 2010	$	10,000	$	3,480	$	29,810		$	4,875		$	36	$	48,201
Net income		—		—		—			2,059			—		2,059
Total other comprehensive income, net of taxes		—		—		—			—			1,406		1,406
Cash dividends		—		—		—			(348	)		—		(348	)
Employee Stock Purchase Plan		—		2		16			—			—		18
Preferred dividends		—		—		—			(250	)		—		(250	)
Amortization of warrant cost		—		—		(7	)		—			—		(7	)
Balance, June 30, 2011	$	10,000	$	3,482	$	29,819		$	6,336		$	1,442	$	51,079

The accompanying notes are an integral part of these consolidated financial statements.

5

MID PENN BANCORP, INC. Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)	Six Months Ended June 30,
	2012			2011
Operating Activities:
Net Income	$	2,494		$	2,059
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses		525			750
Depreciation		546			630
Amortization of intangibles		5			43
Net amortization of securities premiums		175			1,532
Gain on sales of investment securities		(26	)		—
Earnings on cash surrender value of life insurance		(124	)		(130	)
Loss on disposal of bank premises and equipment		1			—
Loss (gain) on sale / write-down of foreclosed assets		58			(59	)
Deferred income tax expense (benefit)		171			(292	)
Decrease (increase) in accrued interest receivable		87			(37	)
Decrease in other assets		516			1,928
Increase in accrued interest payable		38			658
(Decrease) increase in other liabilities		(475	)		39
Net Cash Provided by Operating Activities		3,991			7,121
Investing Activities:
Net decrease (increase) in interest-bearing balances		2,629			(1,072	)
Proceeds from the maturity of investment securities		16,587			9,008
Proceeds from the sale of investment securities		7,717			—
Purchases of investment securities		(12,940	)		(49,689	)
Redemptions of restricted investment in bank stock		303			372
Net increase in loans and leases		(5,842	)		(13,152	)
Purchases of bank premises and equipment		(452	)		(734	)
Proceeds from the sale of bank premises and equipment		42			—
Proceeds from sale of foreclosed assets		1,201			477
Net Cash Provided by (Used in) Investing Activities		9,245			(54,790	)
Financing Activities:
Net (decrease) increase in demand deposits and savings accounts		(551	)		53,514
Net decrease in time deposits		(23,090	)		(2,450	)
Net increase in short-term borrowings		3,445			361
Preferred stock dividend paid		(250	)		(250	)
Common stock dividend paid		(348	)		(348	)
Employee Stock Purchase Plan		28			18
Long-term debt repayment		(95	)		(5,090	)
Net Cash (Used in) Provided by Financing Activities		(20,861	)		45,755
Net decrease in cash and cash equivalents		(7,625	)		(1,914	)
Cash and cash equivalents, beginning of period		17,841			12,901
Cash and cash equivalents, end of period	$	10,216		$	10,987
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	3,857		$	4,297
Income taxes paid		1,085			565
Supplemental Noncash Disclosures:
Loan transfers to foreclosed assets held for sale	$	1,865		$	406

The accompanying notes are an integral part of these consolidated financial statements.

6

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The consolidated financial statements for 2012 and 2011 include the accounts of Mid Penn Bancorp, Inc. (“Mid Penn”), and its subsidiaries Mid Penn Bank (the “Bank”) and Mid Penn Investment Corporation (collectively the “Corporation”). All material intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We believe the information presented is not misleading and the disclosures are adequate. For comparative purposes, the June 30, 2011 and December 31, 2011 balances have been reclassified to conform to the 2012 presentation. Such reclassifications had no impact on net income. The results of operations for interim periods are not necessarily indicative of operating results expected for the full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Mid Penn’s Annual Report on Form 10-K for the year ended December 31, 2011.

Mid Penn has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2012, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued.

2. Investment Securities

Securities to be held for indefinite periods, but not intended to be held to maturity, are classified as available for sale and carried at fair value. Securities held for indefinite periods include securities that management intends to use as part of its asset and liability management strategy and that may be sold in response to liquidity needs, changes in interest rates, resultant prepayment risk, and other factors related to interest rate and resultant prepayment risk changes.

Realized gains and losses on dispositions are based on the net proceeds and the adjusted book value of the securities sold, using the specific identification method. Unrealized gains and losses on investment securities available for sale are based on the difference between book value and fair value of each security. These gains and losses are credited or charged to other comprehensive income, whereas realized gains and losses flow through Mid Penn’s results of operations.

Accounting Standards Codification (“ASC”) Topic 320, Investments – Debt and Equity Securities, clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are done before assessing whether the entity will recover the cost basis of the investment. Previously, this assessment required management to assert it has both the intent and the ability to hold a security for a period of time sufficient to allow for an anticipated recovery in fair value to avoid recognizing other-than-temporary impairment. This change does not affect the need to forecast recovery of the value of the security through either cash flows or market price.

In instances when a determination is made that other-than-temporary impairment exists but the investor does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, this guidance changes the presentation and amount of the other-than-temporary impairment recognized in the income statement. The other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income.

7

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

At June 30, 2012 and December 31, 2011, amortized cost, fair value, and unrealized gains and losses on investment securities are as follows:

(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
June 30, 2012
Available-for-sale securities:
U.S. Treasury and U.S. government agencies	$	24,051	$	1,547	$	—	$	25,598
Mortgage-backed U.S. government agencies		70,232		526		410		70,348
State and political subdivision obligations		49,751		2,130		112		51,769
Equity securities		400		—		8		392
	$	144,434	$	4,203	$	530	$	148,107

(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
December 31, 2011
Available for sale securities:
U.S. Treasury and U.S. government agencies	$	26,116	$	1,501	$	—	$	27,617
Mortgage-backed U.S. government agencies		82,777		491		600		82,668
State and political subdivision obligations		46,654		1,836		124		48,366
Equity securities		400		—		8		392
	$	155,947	$	3,828	$	732	$	159,043

Estimated fair values of debt securities are based on quoted market prices, where applicable. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments, adjusted for differences between the quoted instruments and the instruments being valued.

Mid Penn’s sole equity security is an investment in Access Capital Strategies, an equity fund that invests in low to moderate income financing projects. This investment was purchased in 2004 and additional shares were purchased in 2011 to help fulfill the Bank’s regulatory requirement of the Community Reinvestment Act and at June 30, 2012 and December 31, 2011, is reported at fair value.

Investment securities having a fair value of $45,155,000 at June 30, 2012, and $85,591,000 at December 31, 2011, were pledged to secure public deposits and other borrowings.

Mid Penn realized gross gains of $10,000 and $26,000 on sales of securities available for sale during the three and six months ended June 30, 2012. During the same time periods, Mid Penn realized $0 gross losses on sales of securities available for sale. Mid Penn did not realize any gross gains or losses on the sales of securities available for sale during the three or six months ended June 30, 2011.

8

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The following table presents gross unrealized losses and fair value of investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2012 and December 31, 2011.

(Dollars in thousands)	Less Than 12 Months				12 Months or More				Total
June 30, 2012	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-sale securities:
Mortgage-backed U.S. government agencies	$	38,347	$	355	$	3,715	$	55	$	42,062	$	410
State and political subdivision obligations		4,635		58		1,198		54		5,833		112
Equity securities		—		—		392		8		392		8
Total temporarily impaired available for sale securities	$	42,982	$	413	$	5,305	$	117	$	48,287	$	530

(Dollars in thousands)	Less Than 12 Months				12 Months or More				Total
December 31, 2011	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available-for-sale securities:
Mortgage-backed U.S. government agencies	$	46,497	$	593	$	370	$	7	$	46,867	$	600
State and political subdivision obligations		4,371		49		1,169		75		5,540		124
Equity securities		—		—		392		8		392		8
Total temporarily impaired available for sale securities	$	50,868	$	642	$	1,931	$	90	$	52,799	$	732

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis; and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, and the financial condition and near term prospects of the issuer. In addition, for debt securities, Mid Penn considers (a) whether management has the intent to sell the security, (b) it is more likely than not that management will be required to sell the security prior to its anticipated recovery, and (c) whether management expects to recover the entire amortized cost basis. For equity securities, management considers the intent and ability to hold securities until recovery of unrealized losses.

At June 30, 2012, Mid Penn had 50 debt securities from separate issuers with unrealized losses. These securities have depreciated 1.09% from their amortized cost basis. At December 31, 2011, 45 debt securities with unrealized losses had depreciated 1.37% from the amortized cost basis. These securities are issued by either the U.S. Government or other governmental agencies. These unrealized losses were determined principally by reference to current interest rates for similar types of securities. In analyzing an issuer’s financial condition, management considers whether the U.S. Government or its agencies issued the securities, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. Based on the above conditions management has determined that no declines are deemed to be other-than-temporary.

The table below is the maturity distribution of investment securities at amortized cost and fair value:

(Dollars in thousands)	June 30, 2012
	Amortized Cost		Fair Value
Due in 1 year or less	$	325	$	334
Due after 1 year but within 5 years		25,965		27,422
Due after 5 years but within 10 years		17,966		19,118
Due after 10 years		29,546		30,493
		73,802		77,367
Mortgage-backed securities		70,232		70,348
Equity securities		400		392
	$	144,434	$	148,107

Mortgage-backed securities at June 30, 2012 had an average life of 1.6 years. Prepayment speed assumptions in this category have accelerated since December 31, 2011.

9

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

3. Loans and Allowance for Loan and Lease Losses

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. These amounts are generally being amortized over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loan portfolio is segmented into commercial and consumer loans. Commercial loans consist of the following classes: commercial and industrial, commercial real estate, commercial real estate-construction and lease financing. Consumer loans consist of the following classes: residential mortgage loans, home equity loans and other consumer loans.

For all classes of loans, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days or more past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan and lease losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management’s judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Commercial and industrial

Mid Penn originates commercial and industrial loans. Most of the Bank’s commercial and industrial loans have been extended to finance local and regional businesses and include short-term loans to finance machinery and equipment purchases, inventory, and accounts receivable. Commercial loans also involve the extension of revolving credit for a combination of equipment acquisitions and working capital in expanding companies.

The maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Generally, the maximum term on non-mortgage lines of credit is one year. The loan-to-value ratio on such loans and lines of credit generally may not exceed 80% of the value of the collateral securing the loan. The Bank’s commercial business lending policy includes credit file documentation and analysis of the borrower’s character, capacity to repay the loan, the adequacy of the borrower’s capital and collateral as well as an evaluation of conditions affecting the borrower. Analysis of the borrower’s past, present, and future cash flows is also an important aspect of the Bank’s current credit analysis. Nonetheless, such loans are believed to carry higher credit risk than more traditional investments.

Commercial and industrial loans typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself, which, in turn, is likely to be dependent upon the general economic environment. Mid Penn’s commercial and industrial loans are usually, but not always, secured by business assets and personal guarantees. However, the collateral securing the loans may depreciate over time, may be difficult to appraise, and may fluctuate in value based on the success of the business.

Commercial real estate and commercial real estate – construction

Commercial real estate and commercial real estate construction loans generally present a higher level of risk than loans secured by one to four family residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income producing properties, and the increased difficulty of evaluating and monitoring these types of loans. In addition, the repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced, the borrower’s ability to repay the loan may be impaired.

Lease financing

Mid Penn originates leases for select commercial and state and municipal government lessees. The nature of the leased asset is often subject to rapid depreciation in salvage value over a relatively short time frame or may be of an industry specific nature, making appraisal or liquidation of the asset difficult. These factors have led the Bank to severely curtail the origination of new leases to state or municipal government agencies where default risk is extremely limited and to only the most credit-worthy commercial customers. These commercial customers are primarily leasing fleet vehicles for use in their primary line of business, mitigating some of the asset value concerns within the portfolio. Leasing has been a declining percentage of the Mid Penn’s portfolio, currently representing 0.35% of outstanding loans.

10

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

Residential mortgage

Mid Penn offers a wide array of residential mortgage loans for both permanent structures and those under construction. The Bank’s residential mortgage originations are secured primarily by properties located in its primary market and surrounding areas. Residential mortgage loans have terms up to a maximum of 30 years and with loan to value ratios up to 100% of the lesser of the appraised value of the security property or the contract price. Private mortgage insurance is generally required in an amount sufficient to reduce the Bank’s exposure to at or below the 85% loan to value level. Residential mortgage loans generally do not include prepayment penalties.

In underwriting residential mortgage loans, the Bank evaluates both the borrower’s ability to make monthly payments and the value of the property securing the loan. Most properties securing real estate loans made by Mid Penn are appraised by independent fee appraisers. The Bank generally requires borrowers to obtain an attorney’s title opinion or title insurance and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. Real estate loans originated by the Bank generally contain a “due on sale” clause allowing the Bank to declare the unpaid principal balance due and payable upon the sale of the security property.

The Bank underwrites residential mortgage loans to the standards established by the secondary mortgage market, i.e., Fannie Mae, Ginnie Mae, Freddie Mac, or Pennsylvania Housing Finance Agency standards, with the intention of selling the majority of residential mortgages originated into the secondary market. In the event that the facts and circumstances surrounding a residential mortgage application do not meet all underwriting conditions of the secondary mortgage market, the Bank will evaluate the failed conditions and evaluate the potential risk of holding the residential mortgage in the Bank’s portfolio rather than rejecting the loan request. In the event that the loan is held in the Bank’s portfolio, the interest rate on the residential mortgage would be increased to compensate for the added portfolio risk.

Consumer, including home equity

Mid Penn offers a variety of secured consumer loans, including home equity, automobile, and deposit secured loans. In addition, the Bank offers other secured and unsecured consumer loans. Most consumer loans are originated in Mid Penn’s primary market and surrounding areas.

The largest component of Mid Penn’s consumer loan portfolio consists of fixed rate home equity loans and variable rate home equity lines of credit. Substantially all home equity loans and lines of credit are secured by second mortgages on principal residences. The Bank will lend amounts, which, together with all prior liens, typically may be up to 85% of the appraised value of the property securing the loan. Home equity term loans may have maximum terms up to 20 years while home equity lines of credit generally have maximum terms of five years.

Consumer loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. The underwriting standards employed by the Bank for consumer loans include an application, a determination of the applicant’s payment history on other debts and an assessment of ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, in relation to the proposed loan amount.

Consumer loans may entail greater credit risk than do residential mortgage loans, particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

The allowance for credit losses consists of the allowance for loan and lease losses and the reserve for unfunded lending commitments. The allowance for loan and lease losses represents management’s estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management’s estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheet. The allowance for loan and lease losses is increased by the provision for loan and lease losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan and lease losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of Bankruptcy, or if there is an amount deemed uncollectible. Because all identified losses are immediately charged off, no portion of the allowance for loan and lease losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance for credit losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a monthly evaluation of the adequacy of the allowance. The allowance is based on Mid Penn’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

11

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential real estate, home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include changes in economic conditions, fluctuations in loan quality measures, changes in the experience of the lending staff and loan review systems, growth or changes in the mix of loans originated, and shifting industry or portfolio concentrations.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management’s best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

Mid Penn considers a commercial loan (consisting of commercial and industrial, commercial real estate, commercial real estate-construction, and lease financing loan classes) to be impaired when it becomes 90 days or more past due and not in the process of collection. This methodology assumes the borrower cannot or will not continue to make additional payments. At that time the loan would be considered collateral dependent as the discounted cash flow (“DCF”) method indicates no operating income is available for evaluating the collateral position; therefore, all impaired loans are deemed to be collateral dependent.

In addition, Mid Penn’s rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn’s impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

Mid Penn evaluates loans for charge-off on a monthly basis. Policies that govern the recommendation for charge-off are unique to the type of loan being considered. Commercial loans rated as nonaccrual or lower will first have a collateral evaluation completed in accordance with the guidance on impaired loans. Once the collateral evaluation has been completed, a specific allocation of allowance is made based upon the results of the evaluation. In the event the loan is unsecured, the loan would have been charged-off at the recognition of impairment. If the loan is secured, it will undergo a 90 day waiting period to ensure the collateral shortfall identified in the evaluation is accurate and then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). Commercial loans secured by real estate rated as impaired will also have an initial collateral evaluation completed in accordance with the guidance on impaired loans. An updated real estate valuation is ordered and the collateral evaluation is modified to reflect any variations in value. A specific allocation of allowance is made for any anticipated collateral shortfall and a 90 day waiting period begins to ensure the accuracy of the collateral shortfall. The loan is then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). The process of charge-off for residential mortgage loans begins upon a loan becoming delinquent for 90 days and not in the process of collection. The existing appraisal is reviewed and a lien search is obtained to determine lien position and any instances of intervening liens. A new appraisal of the property will be ordered if deemed necessary by management and a collateral evaluation is completed. The loan will then be charged down to the value indicated in the evaluation. Consumer loans (including home equity loans and other consumer loans) are recommended for charge-off after reaching delinquency of 90 days and the loan is not in the process of collection. The entire balance of the consumer loan is recommended for charge-off at this point.

As noted above, Mid Penn assesses a specific allocation for commercial loans prior to reducing the carrying value or charging off the loan. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). In addition, Mid Penn takes a preemptive step when any commercial loan becomes classified under its internal classification system. A preliminary collateral evaluation in accordance with the guidance on impaired loans is prepared using the existing collateral information in the loan file. This process allows Mid Penn to review both the credit and documentation files to determine the status of the information needed to make a collateral evaluation. This collateral evaluation is preliminary but allows Mid Penn to determine if any potential collateral shortfalls exist.

It is Mid Penn’s policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation. The credit department employs an electronic tracking system to monitor the receipt of and need for updated appraisals. To date, there have been no significant time lapses noted with the above processes.

In some instances Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment. In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value. The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management. Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales. Management reviews the estimates of these third parties and discounts them accordingly based on management’s judgment, if deemed necessary.

12

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

For impaired loans with no valuation allowance required, Mid Penn’s practice of obtaining independent third party market valuations on the subject property within 30 days of being placed on non-accrual status sometimes indicates that the loan to value ratio is sufficient to obviate the need for a specific allocation in spite of significant deterioration in real estate values in Mid Penn’s primary market area. These circumstances are determined on a case by case analysis of the impaired loans.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party.

Mid Penn does not currently, or plan in the future to, use automated valuation methodologies as a method of valuing real estate collateral.

An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, Mid Penn does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the borrowers have been granted concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve interest rates being granted below current market rates for the credit risk of the loan or an extension of a loan’s stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification. Loans classified as troubled debt restructurings are designated as impaired.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower’s overall financial condition, repayment sources, guarantors, and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful, and loss. Loans criticized as special mention have potential weaknesses that deserve management’s close attention. If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects. Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Any loans not classified as noted above are rated pass.

In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for loan and lease losses and may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management’s comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

The classes of the loan portfolio, summarized by the aggregate pass rating and the classified ratings of special mention, substandard, and doubtful within Mid Penn’s internal risk rating system as of June 30, 2012 and December 31, 2011 are as follows:

(Dollars in thousands) June 30, 2012	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial	$	70,308	$	2,903	$	3,910	$	—	$	77,121
Commercial real estate		266,007		9,166		14,020		—		289,193
Commercial real estate – construction		32,470		427		—		—		32,897
Lease financing		1,624		—		—		—		1,624
Residential mortgage		52,690		—		—		—		52,690
Home equity		23,898		204		430		—		24,532
Consumer		7,042		298		585		—		7,925
	$	454,039	$	12,998	$	18,945	$	—	$	485,982

13

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands) December 31, 2011	Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial	$	68,775	$	3,528	$	4,627	$	—	$	76,930
Commercial real estate		271,551		6,530		14,815		—		292,896
Commercial real estate – construction		29,706		445		584		—		30,735
Lease financing		1,724		—		—		—		1,724
Residential mortgage		48,270		—		—		—		48,270
Home equity		23,248		218		683		—		24,149
Consumer		7,705		308		—		—		8,013
	$	450,979	$	11,029	$	20,709	$	—	$	482,717

Impaired loans by loan portfolio class as of June 30, 2012 and December 31, 2011 are summarized as follows:

(Dollars in thousands)	June 30, 2012						December 31, 2011
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial and industrial	$	233	$	1,234	$	—	$	463	$	1,382	$	—
Commercial real estate		7,465		11,100		—		4,473		6,543		—
Commercial real estate – construction		—		—		—		584		592		—
Home equity		34		42		—		251		386		—
With an allowance recorded:
Commercial and industrial	$	636	$	773	$	348	$	656	$	792	$	451
Commercial real estate		1,819		1,944		1,189		4,425		6,163		1,380
Home equity		72		75		13		74		77		15
Consumer		585		585		450		—		—		—
Total:
Commercial and industrial	$	869	$	2,007	$	348	$	1,119	$	2,174	$	451
Commercial real estate		9,284		13,044		1,189		8,898		12,706		1,380
Commercial real estate – construction		—		—		—		584		592		—
Home equity		106		117		13		325		463		15
Consumer		585		585		450		—		—		—

14

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

Average recorded investment of impaired loans and related interest income recognized for the three and six months ended June 30, 2012 and June 30, 2011 are summarized as follows:

	Three Months Ended
(Dollars in thousands)	June 30, 2012				June 30, 2011
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	468	$	—	$	972	$	84
Commercial real estate		7,894		—		4,583		264
Commercial real estate – construction		—		—		844		18
Lease financing				—		150		—
Residential mortgage		—		—		69		11
Home equity		34		4		265		—
With an allowance recorded:
Commercial and industrial	$	656	$	—	$	459	$	—
Commercial real estate		1,865		—		3,593		—
Home equity		73		—		20		—
Consumer		585		—		—		—
Total:
Commercial and industrial	$	1,124	$	—	$	1,431	$	84
Commercial real estate		9,759		—		8,176		264
Commercial real estate – construction		—		—		844		18
Lease financing		—		—		150		—
Residential mortgage		—		—		69		11
Home equity		107		4		285		—
Consumer		585		—		—		—

15

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

	Six Months Ended
	June 30, 2012				June 30, 2011
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	473	$	—	$	1,033	$	84
Commercial real estate		7,942		—		6,003		265
Commercial real estate – construction		—		—		1,249		18
Lease financing		—		—		162		—
Residential mortgage		—		—		71		12
Home equity		35		4		271		—
With an allowance recorded:
Commercial and industrial	$	657	$	—	$	476	$	—
Commercial real estate		1,876		—		3,748		—
Home equity		73		—		24		—
Consumer		585		—		—		—
Total:
Commercial and industrial	$	1,130	$	—	$	1,509	$	84
Commercial real estate		9,818		—		9,751		265
Commercial real estate – construction		—		—		1,249		18
Lease financing		—		—		162		—
Residential mortgage		—		—		71		12
Home equity		108		4		295		—
Consumer		585		—		—		—

Non-accrual loans by loan portfolio class as of June 30, 2012 and December 31, 2011 are summarized as follows:

(Dollars in thousands)	June 30, 2012		December 31, 2011
Commercial and industrial	$	509	$	1,117
Commercial real estate		9,648		8,899
Commercial real estate – construction		—		584
Residential mortgage		751		703
Home equity		369		496
Consumer		585		1
	$	11,862	$	11,800

16

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The classes of the loan portfolio summarized by the past due status as of June 30, 2012 and December 31, 2011 are summarized as follows:

(Dollars in thousands) June 30, 2012	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Receivable > 90 Days and Accruing
Commercial and industrial	$	—	$	22	$	470	$	492	$	76,629	$	77,121	$	—
Commercial real estate		1,697		409		7,655		9,761		279,432		289,193		—
Commercial real estate – construction		54		—		—		54		32,843		32,897		—
Lease financing		—		—		—		—		1,624		1,624		—
Residential mortgage		53		—		751		804		51,886		52,690		—
Home equity		—		—		368		368		24,164		24,532		—
Consumer		3		9		585		597		7,328		7,925		—
Total	$	1,807	$	440	$	9,829	$	12,076	$	473,906	$	485,982	$	—

(Dollars in thousands) December 31, 2011	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Receivable > 90 Days and Accruing
Commercial and industrial	$	141	$	663	$	1,052	$	1,856	$	75,074	$	76,930	$	—
Commercial real estate		1,037		909		6,204		8,150		284,746		292,896		—
Commercial real estate – construction		6		—		584		590		30,145		30,735		—
Lease financing		—		—		—		—		1,724		1,724		—
Residential mortgage		410		11		691		1,112		47,158		48,270		—
Home equity		111		—		428		539		23,610		24,149		—
Consumer		15		3		1		19		7,994		8,013		—
Total	$	1,720	$	1,586	$	8,960	$	12,266	$	470,451	$	482,717	$	—

17

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The following tables summarize the allowance for loan and lease losses and recorded investments in loans receivable:

(Dollars in thousands) As of, and for the periods ended, June 30, 2012		Commercial and industrial			Commercial real estate			Commercial real estate – construction			Lease financing		Residential mortgage			Home equity		Consumer			Unallocated		Total
Allowance for loan and lease losses:
Beginning balance, April 1, 2012	$	1,755		$	3,362		$	27		$	2	$	454		$	323	$	524		$	130	$	6,577
Charge-offs		(12	)		(149	)		(5	)		—		(59	)		—		(5	)		—		(230	)
Recoveries		4			2			—			—		—			1		6			—		13
Provisions		(164	)		225			5			—		80			17		5			57		225
Ending balance, June 30, 2012	$	1,583		$	3,440		$	27		$	2	$	475		$	341	$	530		$	187	$	6,585

	Commercial and industrial			Commercial real estate			Commercial real estate – construction			Lease financing		Residential mortgage			Home equity			Consumer			Unallocated		Total
Beginning balance, January 1, 2012	$	2,274		$	3,544		$	23		$	2	$	362		$	337		$	87		$	143	$	6,772
Charge-offs		(216	)		(455	)		(5	)		—		(69	)		—			(7	)		—		(752	)
Recoveries		8			5			2			—		—			9			16			—		40
Provisions		(483	)		346			7			—		182			(5	)		434			44		525
Ending balance, June 30, 2012	$	1,583		$	3,440		$	27		$	2	$	475		$	341		$	530		$	187	$	6,585
Ending balance: individually evaluated for impairment	$	348		$	1,189		$	—		$	—	$	—		$	13		$	450		$	—	$	2,000
Ending balance: collectively evaluated for impairment	$	1,235		$	2,251		$	27		$	2	$	475		$	328		$	80		$	187	$	4,585
Loans receivable:
Ending balance	$	77,121		$	289,193		$	32,897		$	1,624	$	52,690		$	24,532		$	7,925		$	—	$	485,982
Ending balance: individually evaluated for impairment	$	869		$	9,284		$	—		$	—	$	—		$	106		$	585		$	—	$	10,844
Ending balance: collectively evaluated for impairment	$	76,252		$	279,909		$	32,897		$	1,624	$	52,690		$	24,426		$	7,340		$	—	$	475,138

18

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands) As of, and for the periods ended, June 30, 2011		Commercial and industrial			Commercial real estate			Commercial real estate – construction			Lease financing		Residential mortgage			Home equity			Consumer			Unallocated			Total
Allowance for loan and lease losses:
Beginning balance, April 1, 2011	$	2,442		$	3,833		$	181		$	1	$	310		$	320		$	49		$	36		$	7,172
Charge-offs		(535	)		(176	)		—			—		(45	)		(40	)		(35	)		—			(831	)
Recoveries		4			8			—			—		—			—			10			—			22
Provisions		675			(1	)		(129	)		—		69			32			25			(121	)		550
Ending balance, June 30, 2011	$	2,586		$	3,664		$	52		$	1	$	334		$	312		$	49		$	(85	)	$	6,913

	Commercial and industrial			Commercial real estate			Commercial real estate – construction			Lease financing			Residential mortgage			Home equity			Consumer			Unallocated			Total
Beginning balance, January 1, 2011	$	2,447		$	3,616		$	159		$	1		$	219		$	363		$	61		$	195		$	7,061
Charge-offs		(535	)		(216	)		—			—			(77	)		(40	)		(86	)		—			(954	)
Recoveries		13			17			—			5			1			3			17			—			56
Provisions		661			247			(107	)		(5	)		191			(14	)		57			(280	)		750
Ending balance, June 30, 2011	$	2,586		$	3,664		$	52		$	1		$	334		$	312		$	49		$	(85	)	$	6,913
Ending balance: individually evaluated for impairment	$	371		$	902		$	—		$	—		$	—		$	19		$	—		$	—		$	1,292
Ending balance: collectively evaluated for impairment	$	2,215		$	2,762		$	52		$	1		$	334		$	293		$	49		$	(85	)	$	5,621
Loans receivable:
Ending balance	$	82,420		$	295,527		$	23,449		$	2,206		$	46,067		$	22,266		$	7,647		$	—		$	479,582
Ending balance: individually evaluated for impairment	$	1,119		$	8,049		$	762		$	130		$	68		$	273		$	—		$	—		$	10,401
Ending balance: collectively evaluated for impairment	$	81,301		$	287,478		$	22,687		$	2,076		$	45,999		$	21,993		$	7,647		$	—		$	469,181

19

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands) December 31, 2011	Commercial and industrial		Commercial real estate		Commercial real estate – construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Ending balance	$	2,274	$	3,544	$	23	$	2	$	362	$	337	$	87	$	143	$	6,772
Ending balance: individually evaluated for impairment	$	451	$	1,380	$	—	$	—	$	—	$	15	$	—	$	—	$	1,846
Ending balance: collectively evaluated for impairment	$	1,823	$	2,164	$	23	$	2	$	362	$	322	$	87	$	143	$	4,926
Loans receivable:
Ending balance	$	76,930	$	292,896	$	30,735	$	1,724	$	48,270	$	24,149	$	8,013	$	—	$	482,717
Ending balance: individually evaluated for impairment	$	1,119	$	8,898	$	584	$	—	$	—	$	325	$	—	$	—	$	10,926
Ending balance: collectively evaluated for impairment	$	75,811	$	283,998	$	30,151	$	1,724	$	48,270	$	23,824	$	8,013	$	—	$	471,791

The recorded investments in troubled debt restructured loans at June 30, 2012 and December 31, 2011 are as follows:

(Dollars in thousands) June 30, 2012	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	40	$	35	$	31
Commercial real estate		7,951		4,314		3,497
Residential mortgage		558		552		457
	$	8,549	$	4,901	$	3,985

(Dollars in thousands) December 31, 2011	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	40	$	35	$	32
Commercial real estate		8,315		4,568		3,955
Residential mortgage		698		691		599
Home equity		29		28		16
	$	9,082	$	5,322	$	4,602

Mid Penn’s troubled debt restructured loans at June 30, 2012 totaled $3,985,000, of which eight loans to unrelated borrowers, totaling $457,000, are accruing residential mortgages in compliance with the terms of the modification. The remaining 11 loans totaling $3,528,000 are nonaccrual impaired loans, and resulted in a collateral evaluation in accordance with the guidance on impaired loans. Of these 11 loans, one business relationship accounted for five loans totaling $647,000, another business relationship consisting of two loans totaled $463,000, a large commercial participation totaling $1,768,000 accounted for three loans, and the remaining unrelated loan totaled $650,000. At December 31, 2011, troubled debt restructured loans totaled $4,602,000, of which 10 were accruing residential mortgage loans in compliance with the terms of the modification. These loans were to unrelated borrowers and totaled $599,000. The remaining 14 loans, totaling $4,003,000, were nonaccrual impaired loans, and resulted in a collateral evaluation in accordance with the guidance on impaired loans. Of these 14 loans, one business relationship accounted for five loans totaling $664,000, another business relationship totaling $744,000 accounted for four loans, a large commercial participation totaling $1,929,000 accounted for three loans, and the remaining two loans were to unrelated borrowers and totaled $666,000. As a result of the evaluations at June 30, 2012 and December 31, 2011, a specific allocation and, subsequently, charge offs have been taken as appropriate. As of June 30, 2012 and December 31, 2011, charge offs associated with troubled debt restructured loans while under a

20

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

forbearance agreement totaled $0 and there were no defaulted troubled debt restructured loans as all troubled debt restructured loans were current with respect to their associated forbearance agreements. Four of the current forbearance agreements were negotiated during 2009, while the remaining 15 were negotiated during 2010.

Mid Penn entered into forbearance agreements on all loans currently classified as troubled debt restructures and all of these agreements have resulted in additional principal repayment. The terms of these forbearance agreements vary whereby principal payments have been decreased, interest rates have been reduced and/or the loan will be repaid as collateral is sold.

As a result of adopting the amendments in ASU No. 2011-02, Mid Penn reassessed all restructurings that occurred on or after January 1, 2011 for identification as troubled debt restructurings. Mid Penn identified no loans for which the allowance for loan losses had previously been measured under a general allowance for credit losses methodology that are now considered troubled debt restructurings in accordance with ASU No. 2011-02.

4. Fair Value Measurements

Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. This guidance provides additional information on determining when the volume and level of activity for the asset or liability has significantly decreased. The guidance also includes information on identifying circumstances when a transaction may not be considered orderly.

Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with the fair value measurement and disclosure guidance.

This guidance clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity’s own belief about the assumptions market participants would use in pricing the asset or liability based upon the best information available in the circumstances. Fair value measurement and disclosure guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 Inputs – Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability;

Level 3 Inputs – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

There were no transfers of assets between fair value Level 1 and Level 2 for the six months ended June 30, 2012. The following table illustrates the assets measured at fair value on a recurring basis segregated by hierarchy fair value levels:

21

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands)			Fair value measurements at June 30, 2012 using:
Assets:	Total carrying value at June 30, 2012		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. Treasury and U.S. government agencies	$	25,598	$	—	$	25,598	$	—
Mortgage-backed U.S. government agencies		70,348		—		70,348		—
State and political subdivision obligations		51,769		—		51,769		—
Equity securities		392		392		—		—
	$	148,107	$	392	$	147,715	$	—

(Dollars in thousands)			Fair value measurements at December 31, 2011 using:
Assets:	Total carrying value at December 31, 2011		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. Treasury and U.S. government agencies	$	27,617	$	—	$	27,617	$	—
Mortgage-backed U.S. government agencies		82,668		—		82,668		—
State and political subdivision obligations		48,366		—		48,366		—
Equity securities		392		392		—		—
	$	159,043	$	392	$	158,651	$	—

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

The following table illustrates the assets measured at fair value on a nonrecurring basis segregated by hierarchy fair value levels:

(Dollars in thousands)			Fair value measurements at June 30, 2012 using:
Assets:	Total carrying value at June 30, 2012		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Impaired Loans	$	4,625	$	—	$	—	$	4,625
Foreclosed Assets Held for Sale		106		—		—		106

(Dollars in thousands)			Fair value measurements at December 31, 2011 using:
Assets:	Total carrying value at December 31, 2011		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Impaired Loans	$	5,621	$	—	$	—	$	5,621
Foreclosed Assets Held for Sale		240		—		—		240

22

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Mid Penn has utilized Level 3 inputs to determine the fair value:

(Dollars in thousands)	Quantitative Information about Level 3 Fair Value Measurements
June 30, 2012	Fair Value Estimate		Valuation Technique	Unobservable Input	Range
Impaired Loans	$	4,625	Appraisal of collateral (1)	Appraisal adjustments (2)	10% - 30%
Foreclosed Assets Held for Sale		106	Appraisal of collateral (1), (3)	Appraisal adjustments (2)	10% - 30%

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level 3 inputs which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements.

The following methodologies and assumptions were used to estimate the fair value of Mid Penn’s assets and liabilities:

Cash and Cash Equivalents:

The carrying value of cash and cash equivalents is considered to be a reasonable estimate of fair value.

Interest-bearing Balances with other Financial Institutions:

The estimate of fair value was determined by comparing the present value of quoted interest rates on like deposits with the weighted average yield and weighted average maturity of the balances.

Securities Available for Sale:

The fair value of securities classified as available for sale is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (level 2), 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.

Impaired Loans:

Mid Penn’s rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn’s impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

It is Mid Penn’s policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation.

In some instances Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment. In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value. The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management. Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales. Management reviews the estimates of these third parties and discounts them accordingly based on management’s judgment, if deemed necessary. Mid Penn considers the estimates used in its impairment analysis to be Level 3 inputs.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party. Mid Penn does not currently, or plan to in the future, use automated valuation methodologies as a method of valuing real estate collateral.

Loans:

For variable-rate loans that reprice frequently and which entail no significant changes in credit risk, carrying values approximated fair value. The fair value of other loans are estimated by calculating the present value of the cash flow difference between the current rate and the market rate, for the average maturity, discounted quarterly at the market rate.

23

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

Foreclosed Assets Held for Sale:

Assets included in foreclosed assets held for sale are carried at fair value and accordingly is presented as measured on a non-recurring basis. Values are estimated using Level 3 inputs, based on appraisals that consider the sales prices of property in the proximate vicinity.

Accrued Interest Receivable and Payable:

The carrying amount of accrued interest receivable and payable approximates their fair values.

Restricted Investment in Bank Stocks:

The carrying amount of required and restricted investment in correspondent bank stock approximates fair value, and considers the limited marketability of such securities.

Mortgage Servicing Rights:

The fair value of servicing rights is based on the present value of estimated future cash flows on pools of mortgages by rate and maturity date.

Deposits:

The fair value for demand deposits (e.g., interest and noninterest checking, savings, and money market deposit accounts) is by definition, equal to the amount payable on demand at the reporting date (i.e. their carrying amounts). Fair value for fixed-rate certificates of deposit was estimated using a discounted cash flow calculation by combining all fixed-rate certificates into a pool with a weighted average yield and a weighted average maturity for the pool and comparing the pool with interest rates currently being offered on a similar maturity.

Short-term Borrowings:

Because of time to maturity, the estimated fair value of short-term borrowings approximates the book value.

Long-term Debt:

The estimated fair values of long-term debt were determined using discounted cash flow analysis, based on currently available borrowing rates for similar types of borrowing arrangements.

Commitments to Extend Credit and Letters of Credit:

The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account market interest rates, the remaining terms and present credit worthiness of the counterparties. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements.

The following table summarizes the carrying value and fair value of assets and liabilities at June 30, 2012 and December 31, 2011.

(Dollars in thousands)	June 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	10,216	$	10,216	$	17,841	$	17,841
Interest-bearing balances with other financial institutions		24,848		24,848		27,477		27,477
Investment securities		148,107		148,107		159,043		159,043
Net loans and leases		479,397		499,045		475,945		498,029
Restricted investment in bank stocks		2,817		2,817		3,120		3,120
Accrued interest receivable		2,980		2,980		3,067		3,067
Mortgage servicing rights		199		160		173		123
Financial liabilities:
Deposits	$	610,414	$	620,079	$	634,055	$	644,474
Short-term borrowings		3,445		3,445		—		—
Long-term debt		22,606		23,777		22,701		24,609
Accrued interest payable		1,102		1,102		1,064		1,064
Off-balance sheet financial instruments:
Commitments to extend credit	$	—	$	—	$	—	$	—
Financial standby letters of credit		—		—		—		—

24

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn’s financial instruments as of June 30, 2012. This table excludes financial instruments for which the carrying amount approximates fair value.

					Fair Value Measurements
					Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
(Dollars in thousands)	Carrying Amount		Fair Value
June 30, 2012
Financial instruments – assets
Net loans and leases	$	479,397	$	499,045	$	—	$	—	$	499,045
Mortgage servicing rights		199		160		—		160		—
Financial instruments – liabilities
Deposits		610,414		620,079		—		620,079		—
Long-term debt		22,606		23,777		—		23,777		—

5. Guarantees

In the normal course of business, Mid Penn makes various commitments and incurs certain contingent liabilities, which are not reflected in the accompanying consolidated financial statements. The commitments include various guarantees and commitments to extend credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Mid Penn evaluates each customer’s credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation of the customer. Standby letters of credit and financial guarantees written are conditional commitments to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Mid Penn had $9,601,000 and $7,320,000 of standby letters of credit outstanding as of June 30, 2012 and December 31, 2011, respectively. Mid Penn does not anticipate any losses because of these transactions. The current amount of the liability as of June 30, 2012 for payment under standby letters of credit issued was not material.

6. Short-term Borrowings

Short-term borrowings as of June 30, 2012 consisted of federal funds purchased. There were no short-term borrowings at December 31, 2011. Federal funds purchased are the short-term borrowings needed to manage the Banks overnight liquidity needs.

7. Long-term Debt

During the three and six months ended June 30, 2012, the Bank entered into no additional long-term borrowings with the Federal Home Loan Bank of Pittsburgh. During the same time periods, no long-term borrowings with the Federal Home Loan Bank of Pittsburgh matured.

8. Defined Benefit Plans

Mid Penn has an unfunded noncontributory defined benefit retirement plan for directors. The plan provides defined benefits based on years of service. In addition, Mid Penn sponsors a defined benefit health care plan that provides post-retirement medical benefits and life insurance to qualifying full-time employees. These health care and life insurance plans are noncontributory. A December 31 measurement date for our plans is used.

25

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

The components of net periodic benefit costs from these benefit plans are as follows:

	Three Months Ended June 30,
(Dollars in thousands)	Pension Benefits				Other Benefits
	2012		2011		2012		2011
Service cost	$	5	$	6	$	5	$	5
Interest cost		11		13		9		11
Amortization of prior service cost		6		5		1		—
Net periodic benefit cost	$	22	$	24	$	15	$	16

	Six Months Ended June 30,
(Dollars in thousands)	Pension Benefits				Other Benefits
	2012		2011		2012		2011
Service cost	$	11	$	12	$	10	$	10
Interest cost		23		26		18		22
Amortization of prior service cost		11		10		1		—
Net periodic benefit cost	$	45	$	48	$	29	$	32

9. Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income, net of taxes are as follows:

(Dollars in thousands)	Unrealized Gain on Securities		Defined Benefit Plan Liability			Accumulated Other Comprehensive Income
Balance – June 30, 2012	$	2,408	$	(130	)	$	2,278
Balance – December 31, 2011	$	2,044	$	(128	)	$	1,916

10. Preferred Stock

On December 19, 2008, Mid Penn entered into and closed a Letter Agreement with the United States Department of the Treasury (the “Treasury”) pursuant to which the Treasury invested $10,000,000 in Mid Penn under the Treasury’s Capital Purchase Program (the “CPP”).

Under the CPP, the Treasury received (1) 10,000 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference, and (2) Warrants to purchase up to 73,099 shares of Mid Penn’s common stock at an exercise price of $20.52 per share. The $10,000,000 in new capital is treated as Tier 1 Capital.

The Series A Preferred Stock pays cumulative dividends at a rate of 5% per annum for the first five years and 9% per annum thereafter. Pursuant to the American Recovery and Reinvestment Act of 2009, the Secretary of the Treasury is required to permit, subject to consultation with the appropriate Federal banking agency, Mid Penn to redeem the Series A Preferred Stock. Mid Penn may do so without regard to the source of the funds to be used to redeem the Series A Preferred Stock or any minimum waiting period. Upon redemption of the Series A Preferred Stock, the Secretary of the Treasury must liquidate the warrants associated with Mid Penn’s participation in the CPP at the current market price. Upon the appropriate approval, Mid Penn may redeem the Series A Preferred Stock at the original purchase price plus accrued but unpaid dividends, if any. The related Warrants expire in ten years and are immediately exercisable upon their issuance.

To participate in the program, Mid Penn is required to meet certain standards, including; (1) ensuring that incentive compensation for senior executives does not encourage unnecessary and excessive risk that threaten the value of Mid Penn; (2) requiring a clawback of any bonus or incentive compensation paid to a senior executive based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate; (3) prohibiting Mid Penn from making any golden parachute payment to specified senior executives; and (4) agreeing not to deduct for tax purposes executive compensation in excess of $500,000 for each senior executive.

26

MID PENN BANCORP, INC. Notes to Consolidated Financial Statements (Unaudited)

Based on the Program term sheet provided by the Treasury, the following are the effects on holders of common stock from the issuance of Senior Preferred stock to the Treasury under the Program:

Restrictions on Dividends and Repurchases

For as long as any Senior Preferred shares are outstanding, no dividends can be declared or paid on common shares, nor can Mid Penn repurchase or redeem any common shares, unless all accrued and unpaid dividends for all past dividend periods on the Senior Preferred shares have been fully paid.

Voting Rights

The Senior Preferred shares are non-voting, other than class voting rights on (1) any authorization or issuance of shares ranking senior to the Senior Preferred shares, (2) any amendment to the rights of Senior Preferred, or (3) any merger, exchange or similar transaction which would adversely affect the rights of the Senior Preferred. If dividends on the Senior Preferred shares are not paid in full for six dividend periods, whether or not consecutive, the Senior Preferred shareholder(s) have the right to elect two directors. The right to elect directors would end when full dividends have been paid for four consecutive dividend periods.

11. Earnings per Common Share

Earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each of the periods presented giving retroactive effect to stock dividends and stock splits. The following data show the amounts used in computing basic and diluted earnings per common share. As shown in the table that follows, diluted earnings per common share is computed using weighted average common shares outstanding, plus weighted average common shares available from the exercise of all dilutive stock warrants issued to the U.S. Treasury under the provisions of the Capital Purchase Program, based on the average share price of Mid Penn’s common stock during the period.

The computations of basic earnings per common share follow:

(Dollars in thousands, except per share data)	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Income	$	1,360		$	1,059		$	2,494		$	2,059
Less: Dividends on preferred stock		(125	)		(125	)		(250	)		(250	)
Accretion of preferred stock discount		(4	)		(4	)		(7	)		(7	)
Net income available to common shareholders	$	1,231		$	930		$	2,237		$	1,802
Weighted average common shares outstanding		3,485,867			3,480,750			3,485,203			3,480,282
Basic earnings per common share	$	0.35		$	0.27		$	0.64		$	0.52

The computations of diluted earnings per common share follow:

(Dollars in thousands, except per share data)	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net income available to common shareholders	$	1,231	$	930	$	2,237	$	1,802
Weighted average number of common shares outstanding		3,485,867		3,480,750		3,485,203		3,480,282
Dilutive effect of potential common stock arising from stock warrants:
Exercise of outstanding stock warrants issued to U.S. Treasury under the Capital Repurchase Program		—		—		—		—
Adjusted weighted-average common shares outstanding		3,485,867		3,480,750		3,485,203		3,480,282
Diluted earnings per common share	$	0.35	$	0.27	$	0.64	$	0.52

As of June 30, 2012, Mid Penn had 73,099 warrants that were anti-dilutive because the fair value of the common stock was below the $20.52 exercise price of these warrants.

12. Recent Accounting Pronouncements

There were no new accounting pronouncements affecting Mid Penn during the reporting periods.

27

MID PENN BANCORP, INC. Management’s Discussion and Analysis

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is Management’s Discussion of Consolidated Financial Condition as of June 30, 2012, compared to year-end 2011, and the Results of Operations for the three and six months ended June 30, 2012, compared to the same period in 2011.

This discussion should be read in conjunction with the financial tables, statistics, and the audited financial statements and notes thereto included in Mid Penn’s Annual Report on Form 10-K for the year ended December 31, 2011. The results of operations for interim periods are not necessarily indicative of operating results expected for the full year.

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 Mid Penn to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. The words “expect”, “anticipates”, “intend”, “plan”, “believe”, “estimate”, and similar expressions are intended to identify such forward-looking statements.

Mid Penn’s actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation:

• The effects of economic deterioration on current customers, specifically the effect of the economy on loan customers’ ability to repay loans;

• Governmental monetary and fiscal policies, as well as legislative and regulatory changes, including the effects of the Dodd-Frank Wall Street Reform and Consumer Protection Act;

• 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;

• 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;

• 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 Mid Penn’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;

• The costs and effects of litigation and of unexpected or adverse outcomes in such litigation;

• Technological changes;

• Acquisitions and integration of acquired businesses;

• 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;

• Acts of war or terrorism;

• Volatilities in the securities markets; and

• Deteriorating economic conditions.

Mid Penn undertakes no obligation to publicly revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this report. Readers should carefully review the risk factors described in the documents that we periodically file with the SEC, including Mid Penn’s Annual Report on Form 10-K for the year ended December 31, 2011.

Critical Accounting Estimates

Mid Penn’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and conform to general practices within the banking industry. Application of these principles involves significant judgments and estimates by management that have a material impact on the carrying value of certain assets and liabilities. The judgments and estimates that we used are based on historical experiences and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and estimates that we have made, actual results could differ from these judgments and estimates, which could have a material impact on the carrying values of assets and liabilities and the results of our operations.

Management of Mid Penn considers the accounting judgments relating to the allowance for loan and lease losses, the evaluation of Mid Penn’s investment securities for other-than-temporary impairment, and the assessment of goodwill for impairment to be the accounting areas that require the most subjective and complex judgments.

The allowance for loan and lease losses represents management’s estimate of probable incurred credit losses inherent in the loan and lease portfolio. Determining the amount of the allowance for loan and lease losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change. The loan and lease portfolio also represents the largest asset type on the consolidated balance sheet. Throughout the remainder of this report, the terms “loan” or “loans” refers to both loans and leases.

28

MID PENN BANCORP, INC. Management’s Discussion and Analysis

Valuations for the investment portfolio are determined using quoted market prices, where available. If quoted market prices are not available, investment valuation is based on pricing models, quotes for similar investment securities, and observable yield curves and spreads. In addition to valuation, management must assess whether there are any declines in value below the carrying value of the investments that should be considered other than temporary or otherwise require an adjustment in carrying value and recognition of the loss in the consolidated statement of operations.

Accounting Standards Codification (ASC) Topic 350, Intangibles-Goodwill and Other, requires that goodwill is not amortized to expense, but rather that it be tested for impairment at least annually. Impairment write-downs are charged to results of operations in the period in which the impairment is determined. Mid Penn did not identify any impairment on its outstanding goodwill from its most recent testing, which was performed as of December 31, 2011. If certain events occur which might indicate goodwill has been impaired, the goodwill is tested when such events occur.

Results of Operations

Overview

Net income available to common shareholders was $1,231,000, $0.35 per common share, for the quarter ended June 30, 2012, as compared to net income available to common shareholders of $930,000, or $0.27 per common share, for the quarter ended June 30, 2011, a 32.4% increase. During the six months ended June 30, 2012, net income available to common shareholders was $2,237,000, or $0.64 per common share, versus $1,802,000, or $0.52 per common share for the same period in 2011, a 24.1% increase.

Net interest income increased $433,000, or 7.7%, to $6,023,000 for the quarter ended June 30, 2012 from $5,590,000 during the quarter ended June 30, 2011. Through the first six months of 2012, net interest income increased $1,127,000, or 10.7%, to $11,700,000 from $10,573,000 during the same period in 2011. This increase has been spurred by a moderating cost of funds and increasing levels of average earning assets.

The provision for loan and lease losses in the second quarter of 2012 was $225,000, compared to $550,000 in the second quarter of 2011. During the six months ended June 30, 2012, the provision for loan and lease losses was $525,000 compared to $750,000 for the six months ended June 30, 2011.

Net income as a percent of average assets (return on average assets or “ROA”) and shareholders’ equity (return on average equity or “ROE”) were as follows on an annualized basis:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Return on average assets		0.78	%		0.62	%		0.71	%		0.62	%
Return on average equity		9.96	%		8.53	%		9.22	%		8.44	%

Total assets decreased $18,449,000 to $696,934,000 at June 30, 2012, from $715,383,000 at December 31, 2011. This decrease is mainly attributable to the decline in total deposits, which decreased $23,641,000 from $634,055,000 at December 31, 2011 to $610,414,000 at June 30, 2012. Loan growth during the first six months of 2012 was weak, increasing $3,265,000 from $482,717,000 at December 31, 2011 to $485,982,000 at June 30, 2012. In order to continue improving net interest margin within the current environment, Mid Penn has chosen to manage the balance sheet in such a way that loan and deposit growth in 2012 remain closely matched, and because of this strategy, asset growth has moderated in the first six months of 2012.

Deposit growth has diminished, as noted above, during the first six months of 2012. This allowed for a closer match between funding sources and funding uses, as well as reduced the balance of overnight funding, which has been advantageous from a net interest margin perspective. Numerous deposit repricing opportunities remain throughout 2012, which will continue to help improve cost of funds as well as overall net interest margin despite continued downward pressure on asset yields.

Net Interest Income/Funding Sources

Net interest income, Mid Penn’s primary source of revenue, is the amount by which interest income on loans and investments exceeds interest incurred on deposits and borrowings. The amount of net interest income is affected by changes in interest rates and changes in the volume and mix of interest-sensitive assets and liabilities. Net interest income and corresponding yields are presented in the analysis below on a taxable-equivalent basis. Income from tax-exempt assets, primarily loans to or securities issued by state and local governments, is adjusted by an amount equivalent to the federal income taxes which would have been paid if the income received on these assets was taxable at the statutory rate of 34%. The following table includes average balances, rates, interest income and expense, interest rate spread, and net interest margin:

29

MID PENN BANCORP, INC. Management’s Discussion and Analysis

Average Balances, Effective Interest Differential and Interest Yields

Interest rates and interest differential - taxable equivalent basis

(Dollars in thousands)	For the Six Months Ended June 30, 2012							For the Six Months Ended June 30, 2011
	Average Balance		Interest		Rate (%)			Average Balance		Interest		Rate (%)
ASSETS:
Interest Earning Balances	$	27,269	$	125		0.92	%	$	59,868	$	317		1.07	%
Investment Securities:
Taxable		106,017		773		1.47	%		61,381		547		1.80	%
Tax-Exempt		49,067		1,232		5.05	%		30,037		953		6.40	%
Total Investment Securities		155,084							91,418
Federal Funds Sold		3,701		6		0.33	%		10,884		14		0.26	%
Loans and Leases, Net		484,966		14,065		5.83	%		471,449		14,214		6.08	%
Restricted Investment in Bank Stocks		2,960		2		0.14	%		3,938		—		0.00	%
Total Earning Assets		673,980		16,203		4.83	%		637,557		16,045		5.07	%
Cash and Due from Banks		7,893							7,273
Other Assets		24,531							25,339
Total Assets	$	706,404						$	670,169
LIABILITIES & SHAREHOLDERS’ EQUITY:
Interest Bearing Deposits:
NOW	$	99,887		156		0.31	%	$	51,665		58		0.23	%
Money Market		256,968		1,198		0.94	%		237,433		1,604		1.36	%
Savings		28,745		7		0.05	%		27,220		7		0.05	%
Time		189,603		2,046		2.17	%		212,735		2,767		2.62	%
Short-term Borrowings		898		1		0.22	%		1,020		3		0.59	%
Long-term Debt		22,653		487		4.32	%		24,053		516		4.33	%
Total Interest Bearing Liabilities		598,754		3,895		1.31	%		554,126		4,955		1.80	%
Demand Deposits		47,639							60,218
Other Liabilities		5,302							6,632
Shareholders’ Equity		54,709							49,193
Total Liabilities and Shareholders’ Equity	$	706,404						$	670,169
Net Interest Income			$	12,308						$	11,090
Net Yield on Interest Earning Assets:
Total Yield on Earning Assets						4.83	%						5.07	%
Rate on Supporting Liabilities						1.31	%						1.80	%
Average Interest Spread						3.52	%						3.27	%
Net Interest Margin						3.67	%						3.51	%

For the six months ended June 30, 2012, Mid Penn’s taxable-equivalent net interest margin increased to 3.67%, from 3.51%, as compared to the six months ended June 30, 2011, driven primarily by a reduction in cost of supporting liabilities. Net interest income, on a taxable-equivalent basis, in the first six months of 2012, increased to $12,308,000 from $11,090,000 in the first six months of 2011, related to the changing composition of interest bearing liabilities and the growth in average earning assets, which increased 5.7% from June 30, 2011 to June 30, 2012.

Although the effective interest rate impact on earning assets and funding sources can be reasonably estimated at current interest rate levels, the options selected by customers, and the future mix of the loan, investment, and deposit products in the Bank’s portfolios, may significantly change the estimates used in the simulation models. In addition, our net interest income may be impacted by further interest rate actions of the Federal Reserve Bank.

30

MID PENN BANCORP, INC. Management’s Discussion and Analysis

Provision for Loan Losses

The provision for loan and lease losses is the expense necessary to maintain the allowance for loan and lease losses at a level adequate to absorb management’s estimate of probable losses in the loan and lease portfolio. Mid Penn’s provision for loan and lease losses is based upon management’s monthly review of the loan portfolio. The purpose of the review is to assess loan quality, identify impaired loans and leases, analyze delinquencies, ascertain loan and lease growth, evaluate potential charge-offs and recoveries, and assess general economic conditions in the markets we serve.

During the first six months of 2012, Mid Penn continued to experience a challenging economic and operating environment both on a national and local level. Give the economic pressures that impact some borrowers, Mid Penn has contributed to the allowance for loan and lease losses in accordance with Mid Penn’s assessment process, which took into consideration the decrease in collateral values from December 31, 2011 to June 30, 2012. Mid Penn’s provision for loan and lease losses was $225,000 for the three months ended June 30, 2012, as compared to $550,000 for the three months ended June 30, 2011. During the six months ended June 30, 2012, the provision for loan and lease losses was $525,000, as compared to $750,000 for the six months ended June 30, 2011. For further discussion of factors affecting the provision for loan and lease losses please see Credit Quality, Credit Risk, and Allowance for Loan and Lease Losses in the Financial Condition section of this Management’s Discussion and Analysis.

Noninterest Income

Noninterest income increased $226,000, or 32.1%, during the second quarter of 2012 versus the second quarter of 2011. During the six months ended June 30, 2012, noninterest income increased $206,000, or 14.1%, versus the same period in 2011. The following components of noninterest income showed significant changes:

(Dollars in Thousands)	Three Months Ended June 30,
	2012		2011		$ Variance			% Variance
Income from fiduciary activities	$	189	$	115	$	74			64.3	%
Service charges on deposits		136		189		(53	)		-28.0	%
Mortgage banking income		137		80		57			71.3	%
Other income		397		256		141			55.1	%

(Dollars in Thousands)	Six Months Ended June 30,
	2012		2011		$ Variance			% Variance
Income from fiduciary activities	$	301	$	210	$	91			43.3	%
Service charges on deposits		265		372		(107	)		-28.8	%
Net gain on sales of investment securities		26		—		26			N/A
Mortgage banking income		259		203		56			27.6	%
Other income		694		548		146			26.6	%

Income from fiduciary activities increased during the three and six months ended June 30, 2012 versus the same periods in 2011. This increase was the result of greater sales of third party mutual funds during the first half of 2012. Service charges on deposits, primarily fees from insufficient funds, have decreased during the three and six months ended June 30, 2012. During this period of economic downturn, customers seem to have become more conscientious about their account balances and avoiding unnecessary charges related to insufficient funds. In addition to this behavioral change, Mid Penn was negatively impacted by recent regulatory changes governing overdraft charges on electronic transactions, which has resulted in a reduction in NSF revenue. Mid Penn recognized investment security gains in the first six months of 2012 as a result of efforts to position the portfolio to provide earnings and cash flow in support of anticipated loan growth. Mortgage banking income has been robust during the three and six months ended June 30, 2012. The reduction in both 15 and 30 year mortgage rates has incentivized qualified borrowers to refinance their present mortgages. Purchase activity has increased but is still weak versus pre-recession levels in spite of low financing rates and reduced home prices. During the second quarter of 2012, the former Bank branch at 4098 Derry Street in Harrisburg was sold, resulting in a gain of $40,000. Administrative operations housed in this location were relocated to other facilities within the Bank’s network. Also contributing to the increase in other income during 2012 were increased levels of merchant services and card interchange revenue compared to the same periods in 2011, as well as recognition of $35,000 in sales tax refunds from disputed filings in previous years.

Noninterest Expenses

Noninterest expenses increased $539,000 or 12.2% during the second quarter of 2012, versus the same period in 2011. During the six months ended June 30, 2012, noninterest expenses increased $977,000, or 11.2%, versus the same period in 2011. The changes were primarily a result of the following components of noninterest expense:

31

MID PENN BANCORP, INC. Management’s Discussion and Analysis

	2012		2011			$ Variance			% Variance
Salaries and employee benefits	$	2,619	$	2,401		$	218			-9.1	%
Equipment expense		286		318			(32	)		10.1	%
FDIC assessment		302		217			85			-39.2	%
Marketing and advertising expense		128		95			33			-34.7	%
Loss (gain) on sale/write-down of foreclosed assets		50		(31	)		81			-261.3	%
Other expenses		633		508			125			-24.6	%

(Dollars in Thousands)	Six Months Ended June 30,
	2012		2011			$ Variance			% Variance
Salaries and employee benefits	$	5,215	$	4,602		$	613			-13.3	%
Equipment expense		580		662			(82	)		12.4	%
FDIC assessment		603		531			72			-13.6	%
Marketing and advertising expense		197		158			39			-24.7	%
Loss (gain) on sale/write-down of foreclosed assets		58		(59	)		117			-198.3	%
Loan collection costs		148		91			57			-62.6	%
Other expenses		1,146		1,008			138			-13.7	%

Salaries and employee benefits increased during the three and six months ended June 30, 2012, primarily due to the increase in actual medical claims experienced from Mid Penn’s self-funded medical insurance plan. Also contributing to the increase was the hiring of experienced team members to bolster compliance functions and to add depth to the sales and support areas of Mid Penn. Equipment expense for the three and six months ended June 30, 2012 declined from the same period in 2011, mainly because depreciation expense has been declining as older assets become fully depreciated faster than newly acquired assets have been added. FDIC assessments have increased during the three and six months ended June 30, 2012 due to a combination of the growth in the asset base used in the computation. Marketing and advertising expenses have also increased during the periods noted above due to Mid Penn taking a more active posture toward raising general market awareness as the Bank seeks to grow the institution. A negative variance during the three and six months ended June 30, 2012 was the loss (gain) on sale/write-down of foreclosed assets. Real estate values for these distressed properties have declined, though their liquidation has been able to proceed in a more orderly manner. The escalation in loan collection costs for the six months ended June 30, 2012 is attributed to the portfolio of problem credits migrating through the collection process. Other expenses increased during the three and six months ended June 30, 2012, primarily due to a general increase in overall cost of services utilized.

Income Taxes

The provision for income taxes was $422,000 for the three months ended June 30, 2012, as compared to the provision for income taxes of $278,000 in the same period last year. The effective tax rate for the three months ended June 30, 2012, was 23.6% compared to 20.8% for the three months ended June 30, 2011. The provision for income taxes for the six months ended June 30, 2012 was $665,000, as compared to $519,000 during the same period in 2011. The effective tax rate for the six months ended June 30, 2012 was 21.0% compared to 20.1% for the six months ended June 30, 2011. Generally, our effective tax rate is below the statutory rate due to earnings on tax-exempt loans, investments, and bank-owned life insurance, as well as the impact of tax credits. The realization of deferred tax assets is dependent on future earnings. We currently anticipate that future earnings will be adequate to fully utilize deferred tax assets.

Financial Condition

Loans

During the first six months of 2012, Mid Penn experienced an increase in loans outstanding. Commercial real estate, as well as commercial, industrial, and agricultural, and residential real estate balances showed modest increases as requests from creditworthy borrowers has begun to increase. Balances in the other components of the loan portfolio have eroded through contractual payments and the refinancing of real estate secured debt by borrowers with equity in their properties. While loan demand has shown modest improvement, Mid Penn experienced weaker than normal loan demand during the first six months of 2012 despite a desire to sensibly lend to support creditworthy existing and new customers in our marketplace.

32

MID PENN BANCORP, INC. Management’s Discussion and Analysis

(Dollars in thousands)	June 30, 2012					December 31, 2011
	Amount		%			Amount		%
Commercial real estate, construction and land development	$	250,982		51.6	%	$	249,204		51.6	%
Commercial, industrial and agricultural		78,752		16.2	%		78,655		16.3	%
Real estate – residential		148,331		30.5	%		146,847		30.4	%
Consumer		7,917		1.7	%		8,011		1.7	%
	$	485,982		100.0	%	$	482,717		100.0	%

Most of Mid Penn’s lending activities are with customers located within the trading area of Dauphin County, lower Northumberland County, western Schuylkill County and eastern Cumberland County, Pennsylvania. This region currently, and historically, has lower unemployment than the U.S. as a whole. This is due in part to a diversified manufacturing and services base and the presence of state government offices which help shield the local area from national trends. At June 30, 2012, the unadjusted unemployment rate for the Harrisburg/Carlisle area was 6.7% versus the seasonally adjusted national unemployment rate of 8.2%.

Credit Quality, Credit Risk, and Allowance for Loan and Lease Losses

During the first six months of 2012, Mid Penn had net charge-offs of $712,000 compared to net charge-offs of $898,000 during the same period of 2011. Loans charged off during the first six months of 2012 were comprised of 11 commercial real estate loans totaling $460,000. Five of these loans totaling $168,000 were to two borrowers with the remaining loans to unrelated borrowers. In addition, there were charge-offs for five commercial loans to unrelated borrowers totaling $216,000, four residential real estate loans to unrelated borrowers totaling $69,000, and two consumer loans to unrelated borrowers totaling $7,000. Mid Penn may need to make future adjustments to the allowance and the provision for loan and lease losses if economic conditions or loan credit quality differs substantially from the assumptions used in making Mid Penn’s evaluation of the level of the allowance for loan losses as compared to the balance of outstanding loans.

Changes in the allowance for loan and lease losses for the six months ended June 30, 2012 and 2011 are summarized as follows:

Analysis of the Allowance for Loan and Lease Losses:
(Dollars in thousands)	Six Months Ended			Six Months Ended
	June 30, 2012			June 30, 2011
Average total loans outstanding (net of unearned income)	$	484,966		$	471,449
Period ending total loans outstanding (net of unearned income)	$	485,982		$	479,582
Balance, beginning of period	$	6,772		$	7,061
Loans charged off during period		(752	)		(954	)
Recoveries of loans previously charged off		40			56
Net chargeoffs		(712	)		(898	)
Provision for loan and lease losses		525			750
Balance, end of period	$	6,585		$	6,913
Ratio of net loans charged off to average loans outstanding (annualized)		0.29	%		0.38	%
Ratio of allowance for loan losses to net loans at end of period		1.35	%		1.44	%

Other than as described herein, we do not believe there are any trends, events or uncertainties that are reasonably expected to have a material impact on future results of operations, liquidity, or capital resources. Further, based on known information, we believe that the effects of current and past economic conditions and other unfavorable business conditions may influence certain borrowers’ abilities to comply with their repayment terms. Mid Penn continues to monitor closely the financial strength of these borrowers. Mid Penn does not engage in practices which may be used to artificially shield certain borrowers from the negative economic or business cycle effects that may compromise their ability to repay. Mid Penn does not structure construction loans with interest reserve components. Mid Penn has not in the past performed any commercial real estate or other type loan workouts whereby an existing loan was restructured into multiple new loans. Also, Mid Penn does not extend loans at maturity due to the existence of guarantees, without recognizing the credit as impaired. While the existence of a guarantee may be a mitigating factor in determining the proper level of allowance once impairment has been identified, the guarantee does not affect the impairment analysis.

At June 30, 2012, total nonperforming loans amounted to $12,294,000, or 2.53% of loans and leases net of unearned income, as compared to levels of $12,371,000, or 2.56%, at December 31, 2011 and $12,268,000, or 2.56%, at June 30, 2011.

33

MID PENN BANCORP, INC. Management’s Discussion and Analysis

Schedule of Nonperforming Assets:

(Dollars in thousands)

	June 30, 2012			December 31, 2011			June 30, 2011
Nonperforming Assets:
Nonaccrual loans	$	11,862		$	11,800		$	11,637
Loans renegotiated with borrowers		432			571			631
Total nonperforming loans		12,294			12,371			12,268
Foreclosed real estate		1,537			931			584
Total non-performing assets		13,831			13,302			12,852
Accruing loans 90 days or more past due		—			—			295
Total risk elements	$	13,831		$	13,302		$	13,147
Nonperforming loans as a % of total loans outstanding		2.53	%		2.56	%		2.56	%
Nonperforming assets as a % of total loans outstanding and other real estate		2.84	%		2.76	%		2.68	%
Ratio of allowance for loan losses to nonperforming loans		53.56	%		54.74	%		56.35	%

Mid Penn assesses a specific allocation for both commercial loans and commercial real estate loans prior to charging down or charging off the loan. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact and is not treated as a restructured credit. The following table provides additional analysis of partially charged-off loans:

Schedule of Partially Charged Off Loans:

(Dollars in thousands)

	June 30, 2012			December 31, 2011
Period ending total loans outstanding (net of unearned income)	$	485,982		$	482,717
Allowance for loan and lease losses		6,585			6,772
Total Nonperforming loans		12,294			12,371
Nonperforming and impaired loans with partial charge-offs		4,704			4,505
Ratio of nonperforming loans with partial charge-offs to total loans		0.97	%		0.93	%
Ratio of nonperforming loans with partial charge-offs to total nonperforming loans		38.26	%		36.42	%
Coverage ratio net of nonperforming loans with partial charge-offs		86.76	%		86.09	%
Ratio of total allowance to total loans less nonperforming loans with partial charge-offs		1.37	%		1.42	%

Mid Penn has not experienced any additional charge-offs on loans for which a partial charge-off had originally been taken.

Mid Penn considers a commercial loan or commercial real estate loan to be impaired when it becomes 90 days or more past due and not in the process of collection. This methodology assumes the borrower cannot or will not continue to make additional payments. At that time the loan would be considered collateral dependent as the discounted cash flow (“DCF”) method indicates no operating income is available for evaluating the collateral position; therefore, all impaired loans are deemed to be collateral dependent.

Mid Penn evaluates loans for charge-off on a monthly basis. Policies that govern the recommendation for charge-off are unique to the type of loan being considered. Commercial loans rated as nonaccrual or lower will first have a collateral evaluation completed in accordance with the guidance on impaired loans. Once the collateral evaluation has been completed, a specific allocation of allowance is made based upon the

34

MID PENN BANCORP, INC. Management’s Discussion and Analysis

results of the evaluation. In the event the loan is unsecured, the loan would have been charged-off at the recognition of impairment. If the loan is secured, it will undergo a 90 day waiting period to ensure the collateral shortfall identified in the evaluation is accurate and then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). Commercial real estate loans rated as impaired will also have an initial collateral evaluation completed in accordance with the guidance on impaired loans. An updated real estate valuation is ordered and the collateral evaluation is modified to reflect any variations in value. A specific allocation of allowance is made for any anticipated collateral shortfall and a 90 day waiting period begins to ensure the accuracy of the collateral shortfall. The loan is then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). The process of charge-off for residential mortgage loans begins upon a loan becoming delinquent for 90 days and not in the process of collection. The existing appraisal is reviewed and a lien search is obtained to determine lien position and any instances of intervening liens. A new appraisal of the property will be ordered if deemed necessary by management and a collateral evaluation is completed. The loan will then be charged down to the value indicated in the evaluation. Consumer loans are recommended for charge-off after reaching delinquency of 90 days and the loan is not in the process of collection. The entire balance of the consumer loan is recommended for charge-off at this point.

As noted above, Mid Penn assesses a specific allocation for both commercial loans and commercial real estate loans prior to charging down or charging off the loan. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). In addition, Mid Penn takes a preemptive step when any commercial loan or commercial real estate loan becomes classified under its internal classification system. A preliminary collateral evaluation in accordance with the guidance on impaired loans is prepared using the existing collateral information in the loan file. This process allows Mid Penn to review both the credit and documentation files to determine the status of the information needed to make a collateral evaluation. This collateral evaluation is preliminary but allows Mid Penn to determine if any potential collateral shortfalls exist.

Larger groups of small-balance loans, such as residential mortgages and consumer installment loans are collectively evaluated for impairment. Accordingly, individual consumer and residential loans are not separately identified for impairment disclosures unless such loans are the subject of a restructuring agreement.

Mid Penn’s rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn’s impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

It is Mid Penn’s policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation. The credit department employs an electronic tracking system to monitor the receipt of and need for updated appraisals. To date, there have been no significant time lapses noted with the above processes.

In some instances, Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment. In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value. The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management. Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales. Management reviews the estimates of these third parties and discounts them accordingly based on management’s judgment, if deemed necessary.

For impaired loans with no valuation allowance required, Mid Penn’s practice of obtaining independent third party market valuations on the subject property within 30 days of being placed on non-accrual status sometimes indicates that the loan to value ratio is sufficient to obviate the need for a specific allocation in spite of significant deterioration in real estate values in Mid Penn’s primary market area. These circumstances are determined on a case by case analysis of the impaired loans.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party.

Mid Penn does not currently, or plan in the future to, use automated valuation methodologies as a method of valuing real estate collateral.

As of June 30, 2012, Mid Penn had several unrelated loan relationships, with an aggregate carrying balance of $10,844,000, deemed impaired. This pool of loans is further broken down into a group of loans with an aggregate carrying balance of $3,113,000 for which specific allocations totaling $2,000,000 have been included within the loan loss reserve for these loans. The remaining $7,731,000 of loans requires no specific allocation within the loan loss reserve. The $10,844,000 pool of impaired loan relationships is comprised of $8,557,000 in real estate secured commercial relationships and $2,287,000 in business relationships. There are specific allocations against the real estate secured pool totaling $815,000, spread among eleven relationships; one large relationship accounts for $450,000 of the total pool attributed to this segment. The group of impaired business relationships with specific allocations is made up of six unaffiliated relationships primarily engaged in various forms of manufacturing and a specific allocation of $1,185,000 has been set aside against these credits. Five unrelated manufacturing relationships account for $337,000 of the specific allocations due to the negative effects of the economy on their businesses and the subsequent collateral

35

MID PENN BANCORP, INC. Management’s Discussion and Analysis

devaluation. One additional large commercial participation loan in this pool has shown exceptional collateral devaluation and is responsible for a specific allocation of $848,000 of the total pool attributable to this segment. Management currently believes that the specific reserves are adequate to cover probable future losses related to these relationships.

The allowance for loan losses is a reserve established in the form of a provision expense for loan and lease losses and is reduced by loan charge-offs net of recoveries. In conjunction with an internal loan review function that operates independently of the lending function, management monitors the loan portfolio to identify risk on a monthly basis so that an appropriate allowance is maintained. Based on an evaluation of the loan portfolio, management presents a monthly review of the allowance for loan and lease losses to the Board of Directors, indicating any changes in the allowance since the last review. In making the evaluation, management considers the results of recent regulatory examinations, which typically include a review of the allowance for loan and lease losses an integral part of the examination process.

In establishing the allowance, management evaluates on a quantitative basis individual classified loans and nonaccrual loans, and determines an aggregate reserve for those loans based on that review. In addition, an allowance for the remainder of the loan and lease portfolio is determined based on historical loss experience within certain components of the portfolio. These allocations may be modified if current conditions indicate that loan and lease losses may differ from historical experience.

In addition, a portion of the allowance is established for losses inherent in the loan and lease portfolio which have not been identified by the quantitative processes described above. This determination inherently involves a higher degree of subjectivity, and considers risk factors that may not have yet manifested themselves in historical loss experience. These factors include:

• Changes in local, regional, and national economic and business conditions affecting the collectability of the portfolio, the values of underlying collateral, and the condition of various market segments.

• Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans.

• Changes in the experience, ability, and depth of lending management and other relevant staff as well as the quality of the institution’s loan review system.

• Changes in the nature and volume of the portfolio and the terms of loans generally offered.

• The existence and effect of any concentrations of credit and changes in the level of such concentrations.

While the allowance for loan and lease losses is maintained at a level believed to be adequate by management for covering estimated losses in the loan and lease portfolio, determination of the allowance is inherently subjective, as it requires estimates, all of which may be susceptible to significant change. Changes in these estimates may impact the provisions charged to expense in future periods.

Management believes, based on information currently available, that the allowance for loan and lease losses of $6,585,000 is adequate as of June 30, 2012.

Liquidity

Mid Penn Bank’s objective is to maintain adequate liquidity to meet funding needs at a reasonable cost and to provide contingency plans to meet unanticipated funding needs or a loss of funding sources, while minimizing interest rate risk. Adequate liquidity provides resources for credit needs of borrowers, for depositor withdrawals and for funding corporate operations. Sources of liquidity are as follows:

• A growing core deposit base;

• Proceeds from the sale or maturity of investment securities;

• Proceeds from certificates of deposit in other financial institutions;

• Payments received on loans and mortgage-backed securities; and,

• Overnight correspondent bank borrowings on various credit lines; and,

• Borrowing capacity available from the FHLB.

We believe that our core deposits are stable even in periods of changing interest rates. Liquidity and funds management are governed by policies and are measured on a monthly basis. These measurements indicate that liquidity generally remains stable and exceeds our minimum defined levels of adequacy. Other than the trends of continued competitive pressures and volatile interest rates, there are no known demands, commitments, events, or uncertainties that will result in, or that are reasonably likely to result in, liquidity increasing or decreasing in any material way.

Capital Resources

Shareholders’ equity, or capital, is evaluated in relation to total assets and the risk associated with those assets. The greater a corporation’s capital resources, the more likely it is to meet its cash obligations and absorb unforeseen losses. Too much capital, however, indicates that not enough of the corporation’s earnings have been invested in the continued growth of the business or paid to shareholders. The buildup makes it difficult for a corporation to offer a competitive return on the shareholders’ capital going forward. For these reasons capital adequacy has been, and will continue to be, of paramount importance.

36

MID PENN BANCORP, INC. Management’s Discussion and Analysis

Shareholders’ equity increased during the six months ended June 30, 2012 by $2,279,000 or 4.3%, from December 31, 2011. Capital has been positively impacted in 2012 by positive earnings of $2,237,000, which offset the common dividend payment of $348,000.

Mid Penn maintained the following regulatory capital levels, leverage ratios, and risk-based capital ratios in its bank subsidiary as of June 30, 2012, and December 31, 2011, as follows:

(Dollars in thousands)						Capital Adequacy
											To Be Well-Capitalized Under Prompt
	Actual:					Minimum Capital Required:					Corrective Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2012:
Tier 1 Capital (to Average Assets)	$	52,198		7.5	%	$	27,826		4.0	%	$	34,783		5.0	%
Tier 1 Capital (to Risk Weighted Assets)		52,198		10.8	%		19,377		4.0	%		29,065		6.0	%
Total Capital (to Risk Weighted Assets)		58,262		12.0	%		38,753		8.0	%		48,442		10.0	%
As of December 31, 2011:
Tier 1 Capital (to Average Assets)	$	50,265		7.1	%	$	28,326		4.0	%	$	35,408		5.0	%
Tier 1 Capital (to Risk Weighted Assets)		50,265		10.4	%		19,367		4.0	%		29,051		6.0	%
Total Capital (to Risk Weighted Assets)		56,327		11.6	%		38,735		8.0	%		48,419		10.0	%

Capital Purchase Program Participation

On December 19, 2008, Mid Penn entered into an agreement (including the Securities Purchase Agreement – Standard Terms) (the “Purchase Agreement”) with the United States Department of the Treasury (the “Treasury”) pursuant to which the Treasury invested $10,000,000 in Mid Penn under the Treasury’s Capital Purchase Program (the “CPP”).

Under the Purchase Agreement, the Treasury received (1) 10,000 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference, and (2) Warrants to purchase up to 73,099 shares of the Mid Penn’s common stock at an exercise price of $20.52 per share.

The preferred shares pay cumulative dividends at a rate of 5% per annum for the first five years and 9% per annum thereafter. The preferred shares are non-voting, other than class voting rights on certain matters that could adversely affect the preferred shares. If dividends on the preferred shares have not been paid for an aggregate of six quarterly dividend periods or more, whether consecutive or not, Treasury will have the right to appoint two members of Mid Penn’s Board of Directors to serve until all accrued and unpaid dividends on the preferred shares have been paid.

Mid Penn is generally permitted, subject to consultation with the appropriate Federal banking agency, to redeem the Series A Preferred Stock without regard to the source of the funds to be used to redeem the Series A Preferred Stock or any minimum waiting period. Upon redemption of the Series A Preferred Stock, the Secretary of the Treasury is required to liquidate the warrants associated with Mid Penn’s participation in the CPP at the current market price. Any redemption is subject to the consent of the Board of Governors of the Federal Reserve System.

The warrants are immediately exercisable and have a 10-year term. The exercise price and number of shares subject to the warrants are both subject to anti-dilution adjustments. Treasury has agreed not to exercise voting power with respect to any shares of common stock issued upon exercise of the warrants; however, this agreement not to vote the shares does not apply to any person who may acquire such shares.

37

MID PENN BANCORP, INC. Management’s Discussion and Analysis

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no material change in market risk since December 31, 2011, as reported in Mid Penn’s Form 10-K filed with the SEC on March 26, 2012.

ITEM 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Mid Penn maintains controls and procedures designed to ensure that information required to be disclosed in the reports that Mid Penn files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon their evaluation of those controls and procedures as of June 30, 2012, Mid Penn’s management, with the participation of the Principal Executive Officer and Principal Financial and Accounting Officer, concluded that the disclosure controls and procedures were effective as of such date.

Changes in Internal Controls

During the six months ended June 30, 2012, there were no changes in Mid Penn’s internal control over financial reporting, that have materially affected, or are reasonable likely to materially affect, Mid Penn’s internal control over financial reporting.

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 Mid Penn. There are no proceedings pending other than the ordinary routine litigation incident to the business of Mid Penn. In addition, management does not know of any material proceedings contemplated by governmental authorities against Mid Penn or any of its properties.

ITEM 1A – RISK FACTORS

Management has reviewed the risk factors that were previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2011. There are no material changes from the risk factors as previously disclosed in the Form 10-K.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 – MINE SAFETY DISCLOSURES

Not Applicable

ITEM 5 – OTHER INFORMATION

None

38

MID PENN BANCORP, INC. Management’s Discussion and Analysis

ITEM 6 – EXHIBITS

• Exhibit 3(i) – The Registrant’s amended Articles of Incorporation (Incorporated by reference to Exhibit 3(i) to Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 11, 2009.)

• Exhibit 3(ii) – Statement with Respect to Shares for Series A Preferred Stock. (Incorporated by reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on December 22, 2008.)

• Exhibit 3(iii) – The Registrant’s By-laws (Incorporated by reference to Exhibit 3(ii) to Registrant’s Current Report on form 8-K filed with the Securities and Exchange Commission on August 30, 2010.)

• Exhibit 4 – Warrants for Purchase of Shares of Common Stock. (Incorporated by reference to Exhibit 4.1 to Registrant’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on December 22, 2008).

• Exhibit 11 – Statement re: Computation of Per Share Earnings. (Incorporated by reference to Part I Item 1 of this Quarterly Report on Form 10-Q.)

• Exhibit 31.1 – Certification of Principal Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002.

• Exhibit 31.2 – Certification of Principal Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a) as added by Section 302 of the Sarbanes-Oxley Act of 2002.

• Exhibit 32 – Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002.

• Exhibit 101.LAB – XBRL Taxonomy Extension Label Linkbase

• Exhibit 101.PRE – XBRL Taxonomy Extension Presentation Linkbase

• Exhibit 101.INS – XBRL Instance Document

• Exhibit 101.SCH – XBRL Taxonomy Extension Schema

• Exhibit 101.CAL – XBRL Taxonomy Extension Calculation Linkbase

• Exhibit 101.DEF – XBRL Taxonomy Extension Definition Linkbase

39

MID PENN BANCORP, INC.

SIGNATURES

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)
By	/s/ Rory G. Ritrievi
	Rory G. Ritrievi
	President and CEO
	(Principal Executive Officer)

Date: August 14, 2012
By	/s/ Kevin W. Laudenslager
	Kevin W. Laudenslager
	Treasurer
	(Principal Financial and Principal Accounting Officer)
Date: August 14, 2012

40

EX-31.1

MID PENN BANCORP, INC.

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT RULES

13A-14(A)/15D-14(A) AS ADDED BY SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Rory G. Ritrievi, certify that:

1. I have reviewed this report on Form 10-Q of Mid Penn Bancorp, Inc.;

2. Based on my knowledge, this 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 report.

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting 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.

By	/s/ Rory G. Ritrievi
	President and CEO
	(Principal Executive Officer)
Date: August 14, 2012

EX-31.2

MID PENN BANCORP, INC.

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT RULES

13A-14(A)/15D-14(A) AS ADDED BY SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION

I, Kevin W. Laudenslager, certify that:

1. I have reviewed this report on Form 10-Q of Mid Penn Bancorp, Inc.;

2. Based on my knowledge, this 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 report.

3. Based on my knowledge, the financial statements, and other financial information included in this 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 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 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting 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.

By	/s/ Kevin W. Laudenslager
	Treasurer
	(Principal Financial and Principal Accounting Officer)
Date:	August 14, 2012

EX-32

MID PENN BANCORP, INC.

EXHIBIT 32

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND

PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADDED BY SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the report of Mid Penn Bancorp, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rory G. Ritrievi and I, Kevin W. Laudenslager certify, pursuant to 18 U.S.C. Section 1350, as added pursuant to Section 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.

2. To my knowledge, the information contained in the Report fairly presents, in all material respects the financial condition and results of operations of Mid Penn Bancorp, Inc. as of the dates and for the periods expressed in the Report.

By	/s/ Rory G. Ritrievi
	President and CEO
	(Principal Executive Officer)
Date:	August 14, 2012
By	/s/ Kevin W. Laudenslager
	Treasurer
	(Principal Financial and Principal Accounting Officer)
Date:	August 14, 2012

XML

Loans and Allowance for Loan and Lease Losses (Allowance For Loan Losses And Recorded Investment In Financing Receivables) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended			6 Months Ended					3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Commercial and industrial [Member]	Jun. 30, 2011 Commercial and industrial [Member]	Jun. 30, 2012 Commercial and industrial [Member]	Jun. 30, 2011 Commercial and industrial [Member]	Dec. 31, 2011 Commercial and industrial [Member]	Jun. 30, 2012 Commercial real estate [Member]	Jun. 30, 2011 Commercial real estate [Member]	Jun. 30, 2012 Commercial real estate [Member]	Jun. 30, 2011 Commercial real estate [Member]	Dec. 31, 2011 Commercial real estate [Member]	Jun. 30, 2012 Commercial real estate - construction [Member]	Jun. 30, 2011 Commercial real estate - construction [Member]	Jun. 30, 2012 Commercial real estate - construction [Member]	Jun. 30, 2011 Commercial real estate - construction [Member]	Dec. 31, 2011 Commercial real estate - construction [Member]	Jun. 30, 2011 Lease financing [Member]	Jun. 30, 2012 Lease financing [Member]	Mar. 31, 2012 Lease financing [Member]	Dec. 31, 2011 Lease financing [Member]	Mar. 31, 2011 Lease financing [Member]	Jun. 30, 2012 Residential mortgage [Member]	Jun. 30, 2011 Residential mortgage [Member]	Jun. 30, 2012 Residential mortgage [Member]	Jun. 30, 2011 Residential mortgage [Member]	Dec. 31, 2011 Residential mortgage [Member]	Jun. 30, 2012 Home equity [Member]	Jun. 30, 2011 Home equity [Member]	Jun. 30, 2012 Home equity [Member]	Jun. 30, 2011 Home equity [Member]	Dec. 31, 2011 Home equity [Member]	Jun. 30, 2012 Consumer [Member]	Jun. 30, 2011 Consumer [Member]	Jun. 30, 2012 Consumer [Member]	Jun. 30, 2011 Consumer [Member]	Dec. 31, 2011 Consumer [Member]	Jun. 30, 2012 Unallocated Financing Receivables [Member]	Jun. 30, 2011 Unallocated Financing Receivables [Member]	Jun. 30, 2012 Unallocated Financing Receivables [Member]	Jun. 30, 2011 Unallocated Financing Receivables [Member]	Dec. 31, 2011 Unallocated Financing Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for Loan Losses, Beginning Balance	$ 6,577	$ 7,172	$ 6,772	$ 7,061		$ 1,755	$ 2,442	$ 2,274	$ 2,447		$ 3,362	$ 3,833	$ 3,544	$ 3,616		$ 27	$ 181	$ 23	$ 159		$ 1	$ 2	$ 2	$ 2	$ 1	$ 454	$ 310	$ 362	$ 219		$ 323	$ 320	$ 337	$ 363		$ 524	$ 49	$ 87	$ 61		$ 130	$ 36	$ 143	$ 195
Charge-offs	(230)	(831)	(752)	(954)		(12)	(535)	(216)	(535)		(149)	(176)	(455)	(216)		(5)		(5)								(59)	(45)	(69)	(77)			(40)		(40)		(5)	(35)	(7)	(86)
Recoveries	13	22	40	56		4	4	8	13		2	8	5	17				2			5								1		1		9	3		6	10	16	17
Provision for loan and lease losses	225	550	525	750		(164)	675	(483)	661		225	(1)	346	247		5	(129)	7	(107)		(5)					80	69	182	191		17	32	(5)	(14)		5	25	434	57		57	(121)	44	(280)
Allowance for Loan Losses, Ending Balance	6,585	6,913	6,585	6,913		1,583	2,586	1,583	2,586		3,440	3,664	3,440	3,664		27	52	27	52		1	2	2	2	1	475	334	475	334		341	312	341	312		530	49	530	49		187	(85)	187	(85)
Allowance for loan losses: Ending balance: individually evaluated for impairment	2,000	1,292	2,000	1,292	1,846	348	371	348	371	451	1,189	902	1,189	902	1,380																13	19	13	19	15	450		450
Allowance for loan losses: Ending balance: collectively evaluated for impairment	4,585	5,621	4,585	5,621	4,926	1,235	2,215	1,235	2,215	1,823	2,251	2,762	2,251	2,762	2,164	27	52	27	52	23	1	2		2		475	334	475	334	362	328	293	328	293	322	80	49	80	49	87	187	(85)	187	(85)	143
Loans receivables, Ending Balance	485,982	479,582	485,982	479,582	482,717	77,121	82,420	77,121	82,420	76,930	289,193	295,527	289,193	295,527	292,896	32,897	23,449	32,897	23,449	30,735	2,206	1,624		1,724		52,690	46,067	52,690	46,067	48,270	24,532	22,266	24,532	22,266	24,149	7,925	7,647	7,925	7,647	8,013
Loans receivables: Ending balance: individually evaluated for impairment	10,844	10,401	10,844	10,401	10,926	869	1,119	869	1,119	1,119	9,284	8,049	9,284	8,049	8,898		762		762	584	130						68		68		106	273	106	273	325	585		585
Loans Receivable: Ending balance: collectively evaluated for impairment	$ 475,138	$ 469,181	$ 475,138	$ 469,181	$ 471,791	$ 76,252	$ 81,301	$ 76,252	$ 81,301	$ 75,811	$ 279,909	$ 287,478	$ 279,909	$ 287,478	$ 283,998	$ 32,897	$ 22,687	$ 32,897	$ 22,687	$ 30,151	$ 2,076	$ 1,624		$ 1,724		$ 52,690	$ 45,999	$ 52,690	$ 45,999	$ 48,270	$ 24,426	$ 21,993	$ 24,426	$ 21,993	$ 23,824	$ 7,340	$ 7,647	$ 7,340	$ 7,647	$ 8,013

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Accumulated Other Comprehensive Income (Accumulated Other Comprehensive Income, Net of Taxes) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income, Net of Taxes [Abstract]
Unrealized Gains on Securities	$ 2,408	$ 2,044
Defined Benefit Plan Liability	(130)	(128)
Accumulated Other Comprehensive Income	$ 2,278	$ 1,916

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Guarantees (Narrative) (Details) (Standby Letters Of Credit [Member], USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Standby Letters Of Credit [Member]
Guarantor Obligations [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	$ 9,601	$ 7,320

XML

Loans and Allowance for Loan and Lease Losses (Narrative) (Details) (USD $)	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Number of Contracts	0		15	4
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	$ 0
Financing Receivable, Modifications, Recorded Investment	3,985,000	4,602,000
Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	457,000	599,000
Private Mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan To Value Ratio	85.00%
Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	31,000	32,000
Lease financing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Portfolio Percentage	0.35%
Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment		16,000
Nonaccruing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Number of Contracts		14
Nonaccruing [Member] | Unallocated Financing Receivables [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Recorded Investment	3,528,000	4,003,000
Accruing [Member] | Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Financing Receivable, Modifications, Number of Contracts	8	10
Financing Receivable, Modifications, Recorded Investment	$ 457,000	$ 599,000
Maximum [Member] | Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan To Value Ratio	100.00%
Loan Terms	30 years
Maximum [Member] | Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan To Value Ratio	80.00%
Line Of Credit Terms	1 year
Maximum [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan To Value Ratio	85.00%
Maximum [Member] | Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loan Terms	20 years
Line Of Credit Terms	5 years

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Loans and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2012

Loans and Allowance for Loan and Lease Losses [Abstract]

Classes Of The Loan Portfolio Summarized By The Aggregate Risk Rating [Table Text Block]

(Dollars in thousands)                           June 30, 2012	Pass	Special Mention	Substandard	Doubtful	Total
Commercial and industrial	$    70,308	$    2,903	$       3,910	$             -	$    77,121
Commercial real estate	266,007	9,166	14,020	-	289,193
Commercial real estate - construction	32,470	427	-	-	32,897
Lease financing	1,624	-	-	-	1,624
Residential mortgage	52,690	-	-	-	52,690
Home equity	23,898	204	430	-	24,532
Consumer	7,042	298	585	-	7,925
	$ 454,039	$  12,998	$    18,945	$             -	$  485,982

(Dollars in thousands)                   December 31, 2011	Pass	Special Mention	Substandard	Doubtful	Total
Commercial and industrial	$    68,775	$    3,528	$       4,627	$             -	$    76,930
Commercial real estate	271,551	6,530	14,815	-	292,896
Commercial real estate - construction	29,706	445	584	-	30,735
Lease financing	1,724	-	-	-	1,724
Residential mortgage	48,270	-	-	-	48,270
Home equity	23,248	218	683	-	24,149
Consumer	7,705	308	-	-	8,013
	$  450,979	$  11,029	$     20,709	$             -	$  482,717

Impaired Loans By Loan Portfolio Class [Table Text Block]

(Dollars in thousands)	June 30, 2012			December 31, 2011
	Recorded Investment	Unpaid Principal Balance	Related Allowance	Recorded Investment	Unpaid Principal Balance	Related Allowance
With no related allowance recorded:
Commercial and industrial	$        233	$     1,234	$             -	$        463	$     1,382	$             -
Commercial real estate	7,465	11,100	-	4,473	6,543	-
Commercial real estate - construction	-	-	-	584	592	-
Home equity	34	42	-	251	386	-
With an allowance recorded:
Commercial and industrial	$        636	$        773	$        348	$        656	$        792	$        451
Commercial real estate	1,819	1,944	1,189	4,425	6,163	1,380
Home equity	72	75	13	74	77	15
Consumer	585	585	450	-	-	-
Total:
Commercial and industrial	$        869	$     2,007	$        348	$     1,119	$     2,174	$        451
Commercial real estate	9,284	13,044	1,189	8,898	12,706	1,380
Commercial real estate - construction	-	-	-	584	592	-
Home equity	106	117	13	325	463	15
Consumer	585	585	450	-	-	-

Average Of Impaired Loans And Related Interest Income By Loan Portfolio Class [Table Text Block]

	Three Months Ended
(Dollars in thousands)	June 30, 2012		June 30, 2011
	Average Recorded Investment	Interest Income Recognized	Average Recorded Investment	Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$             468	$                  -	$             972	$               84
Commercial real estate	7,894	-	4,583	264
Commercial real estate - construction	-	-	844	18
Lease financing		-	150	-
Residential mortgage	-	-	69	11
Home equity	34	4	265	-
With an allowance recorded:
Commercial and industrial	$             656	$                  -	$             459	$                  -
Commercial real estate	1,865	-	3,593	-
Home equity	73	-	20	-
Consumer	585	-	-	-
Total:
Commercial and industrial	$          1,124	$                  -	$          1,431	$               84
Commercial real estate	9,759	-	8,176	264
Commercial real estate - construction	-	-	844	18
Lease financing	-	-	150	-
Residential mortgage	-	-	69	11
Home equity	107	4	285	-
Consumer	585	-	-	-

	Six Months Ended
	June 30, 2012		June 30, 2011
(Dollars in thousands)	Average Recorded Investment	Interest Income Recognized	Average Recorded Investment	Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$             473	$                  -	$          1,033	$               84
Commercial real estate	7,942	-	6,003	265
Commercial real estate - construction	-	-	1,249	18
Lease financing	-	-	162	-
Residential mortgage	-	-	71	12
Home equity	35	4	271	-
With an allowance recorded:
bCommercial and industrial	$             657	$                  -	$             476	$                  -
Commercial real estate	1,876	-	3,748	-
Home equity	73	-	24	-
Consumer	585	-	-	-
Total:
Commercial and industrial	$          1,130	$                  -	$          1,509	$               84
Commercial real estate	9,818	-	9,751	265
Commercial real estate - construction	-	-	1,249	18
Lease financing	-	-	162	-
Residential mortgage	-	-	71	12
Home equity	108	4	295	-
Consumer	585	-	-	-

Nonaccrual Loans By Classes Of The Loan Portfolio [Table Text Block]

(Dollars in thousands)	June 30, 2012	December 31, 2011
Commercial and industrial	$                  509	$                 1,117
Commercial real estate	9,648	8,899
Commercial real estate - construction	-	584
Residential mortgage	751	703
Home equity	369	496
Consumer	585	1
	$             11,862	$                  11,800

Loan Portfolio Summarized By The Past Due Status [Table Text Block]

(Dollars in thousands)        June 30, 2012	30-59 Days Past Due	60-89 Days Past Due	Greater than 90 Days	Total Past Due	Current	Total Loans	Loans Receivable > 90 Days and Accruing
Commercial and industrial	$           -	$        22	$      470	$      492	$  76,629	$ 77,121	$             -
Commercial real estate	1,697	409	7,655	9,761	279,432	289,193	-
Commercial real estate - construction	54	-	-	54	32,843	32,897	-
Lease financing	-	-	-	-	1,624	1,624	-
Residential mortgage	53	-	751	804	51,886	52,690	-
Home equity	-	-	368	368	24,164	24,532	-
Consumer	3	9	585	597	7,328	7,925	-
Total	$   1,807	$      440	$   9,829	$ 12,076	$473,906	$ 485,982	$            -

(Dollars in thousands)  December 31, 2011	30-59 Days Past Due	60-89 Days Past Due	Greater than 90 Days	Total Past Due	Current	Total Loans	Loans Receivable > 90 Days and Accruing
Commercial and industrial	$      141	$      663	$   1,052	$   1,856	$  75,074	$   76,930	$             -
Commercial real estate	1,037	909	6,204	8,150	284,746	292,896	-
Commercial real estate - construction	6	-	584	590	30,145	30,735	-
Lease financing	-	-	-	-	1,724	1,724	-
Residential mortgage	410	11	691	1,112	47,158	48,270	-
Home equity	111	-	428	539	23,610	24,149	-
Consumer	15	3	1	19	7,994	8,013	-
Total	$   1,720	$   1,586	$   8,960	$ 12,266	$470,451	$ 482,717	$             -

Allowance For Loan Losses And Recorded Investment In Financing Receivables [Table Text Block]

(Dollars in thousands)
As of, and for the period ended, June 30, 2012	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Allowance for loan and lease losses:
Beginning balance, April 1, 2012	$       1,755	$       3,362	$            27	$          2	$         454	$  323	$          524	$          130	$ 6,577
Charge-offs	(12)	(149)	(5)	-	(59)	-	(5)	-	(230)
Recoveries	4	2	-	-	-	1	6	-	13
Provisions	(164)	225	5	-	80	17	5	57	225
Ending balance,         June 30, 2012	$       1,583	$       3,440	$            27	$          2	$         475	$  341	$          530	$          187	$ 6,585
	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Beginning balance,        January 1, 2012	$       2,274	$       3,544	$            23	$          2	$         362	$  337	$             87	$          143	$ 6,772
Charge-offs	(216)	(455)	(5)	-	(69)	-	(7)	-	(752)
Recoveries	8	5	2	-	-	9	16	-	40
Provisions	(483)	346	7	-	182	(5)	434	44	525
Ending balance,         June 30, 2012	$       1,583	$       3,440	$            27	$          2	$         475	$  341	$          530	$          187	$ 6,585
Ending balance: individually evaluated for impairment	$          348	$       1,189	$               -	$          -	$             -	$    13	$          450	$               -	$ 2,000
Ending balance: collectively evaluted for impairment	$       1,235	$       2,251	$            27	$          2	$         475	$  328	$             80	$          187	$ 4,585
Loans receivable:
Ending balance	$     77,121	$   289,193	$     32,897	$   1,624	$    52,690	$24,532	$       7,925	$               -	$ 485,982
Ending balance: individually evaluted  for impairment	$          869	$       9,284	$               -	$          -	$             -	$    106	$          585	$               -	$     10,844
Ending balance: collectively evaluated for impairment	$     76,252	$   279,909	$     32,897	$   1,624	$   52,690	$24,426	$       7,340	$               -	$   475,138

(Dollars in thousands)
As of, and for the period ended, June 30, 2011	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Allowance for loan and lease losses:
Beginning balance,        April 1, 2011	$       2,442	$       3,833	$           181	$            1	$         310	$  320	$             49	$              36	$   7,172
Charge-offs	(535)	(176)	-	-	(45)	(40)	(35)	-	(831)
Recoveries	4	8	-	-	-	-	10	-	22
Provisions	675	(1)	(129)	-	69	32	25	(121)	550
Ending balance,         June 30, 2011	$       2,586	$       3,664	$             52	$            1	$         334	$  312	$             49	$           (85)	$   6,913
	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Beginning balance, January 1, 2011	$       2,447	$       3,616	$           159	$            1	$         219	$  363	$              61	$            195	$   7,061
Charge-offs	(535)	(216)	-	-	(77)	(40)	(86)	-	(954)
Recoveries	13	17	-	5	1	3	17	-	56
Provisions	661	247	(107)	(5)	191	(14)	57	(280)	750
Ending balance,         June 30, 2011	$       2,586	$       3,664	$             52	$            1	$         334	$  312	$             49	$           (85)	$   6,913
Ending balance: individually evaluated for impairment	$          371	$          902	$               -	$             -	$              -	$    19	$              -	$                -	$   1,292
Ending balance: collectively evaluted for impairment	$       2,215	$       2,762	$             52	$            1	$         334	$  293	$             49	$           (85)	$   5,621
Loans receivable:
Ending balance	$     82,420	$   295,527	$      23,449	$     2,206	$    46,067	$22,266	$       7,647	$                -	$479,582
Ending balance: individually evaluted  for impairment	$       1,119	$       8,049	$           762	$        130	$           68	$    273	$              -	$                -	$ 10,401
Ending balance: collectively evaluated for impairment	$     81,301	$   287,478	$      22,687	$     2,076	$    45,999	$21,993	$       7,647	$                -	$469,181

(Dollars in thousands) December 31, 2011	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Allowance for loan and lease losses:
Ending balance	$       2,274	$       3,544	$             23	$          2	$          362	$     337	$             87	$          143	$   6,772
Ending balance: individually evaluated for impairment	$          451	$       1,380	$               -	$          -	$               -	$       15	$              -	$               -	$   1,846
Ending balance: collectively evaluted for impairment	$       1,823	$       2,164	$             23	$          2	$          362	$     322	$             87	$          143	$   4,926
Loans receivable:
Ending balance	$     76,930	$   292,896	$      30,735	$   1,724	$     48,270	$24,149	$        8,013	$               -	$482,717
Ending balance: individually evaluted  for impairment	$       1,119	$       8,898	$           584	$          -	$               -	$     325	$              -	$               -	$ 10,926
Ending balance: collectively evaluated for impairment	$     75,811	$   283,998	$      30,151	$   1,724	$     48,270	$23,824	$        8,013	$               -	$471,791

Troubled Debt Restructurings [Table Text Block]

(Dollars in thousands)                       June 30, 2012	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment	Recorded Investment
Commercial and industrial	$                      40	$                     35	$                     31
Commercial real estate	951	4,314	3,497
Residential mortgage	558	552	457
	$                 8,549	$                4,901	$                3,985

(Dollars in thousands)                December 31, 2011	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment	Recorded Investment
Commercial and industrial	$                      40	$                     35	$                     32
Commercial real estate	8,315	4,568	3,955
Residential mortgage	698	691	599
Home equity	29	28	16
	$                 9,082	$                5,322	$                4,602

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Earnings Per Common Share (Basic Earnings Per Share Computation) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 19, 2008
Earnings per Common Share [Abstract]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	73,099		73,099		73,099
Class of Warrant or Right, Exercise Price of Warrants or Rights	20.52		20.52		20.52
Net income	$ 1,360	$ 1,059	$ 2,494	$ 2,059
Dividends on preferred stock	125	125	250	250
Accretion of preferred stock discount	4	4	7	7
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	1,231	930	2,237	1,802
Weighted average common shares outstanding	3,485,867	3,480,750	3,485,203	3,480,282
Earnings Per Share, Basic	$ 0.35	$ 0.27	$ 0.64	$ 0.52
Dilutive Securities, Effect on Basic Earnings Per Share
Adjusted weighted-average common shares outstanding	3,485,867	3,480,750	3,485,203	3,480,282
Earnings Per Share, Diluted	$ 0.35	$ 0.27	$ 0.64	$ 0.52

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Fair Value Measurements (Fair Value Measurements, Nonrecurring) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed assets held for resale	$ 1,537	$ 931
Total Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	4,625	5,621
Foreclosed assets held for resale	106	240
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Foreclosed assets held for resale
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Foreclosed assets held for resale
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	4,625	5,621
Foreclosed assets held for resale	$ 106	$ 240

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Loans and Allowance for Loan and Lease Losses (Nonaccrual Loans By Classes Of The Loan Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 11,862	$ 11,800
Commercial and industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	509	1,117
Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	9,648	8,899
Commercial real estate - construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status		584
Residential mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	751	703
Home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	369	496
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Nonaccrual Status	$ 585	$ 1

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Defined Benefit Plans (Schedule of Net Periodic Benefit Costs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 5	$ 6	$ 11	$ 12
Interest cost	11	13	23	26
Amortization of prior service cost	6	5	11	10
Net periodic benefit cost	22	24	45	48
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	5	5	10	10
Interest cost	9	11	18	22
Amortization of prior service cost	1		1
Net periodic benefit cost	$ 15	$ 16	$ 29	$ 32

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Basis of Presentation

6 Months Ended

Jun. 30, 2012

Basis of Presentation [Abstract]

Basis of Presentation

1. Basis of Presentation

The consolidated financial statements for 2012 and 2011 include the accounts of Mid Penn Bancorp, Inc. ("Mid Penn"), and its subsidiaries Mid Penn Bank (the "Bank") and Mid Penn Investment Corporation (collectively the "Corporation"). All material intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). We believe the information presented is not misleading and the disclosures are adequate. For comparative purposes, the June 30, 2011 and December 31, 2011 balances have been reclassified to conform to the 2012 presentation. Such reclassifications had no impact on net income. The results of operations for interim periods are not necessarily indicative of operating results expected for the full year. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in Mid Penn's Annual Report on Form 10-K for the year ended December 31, 2011.

Mid Penn has evaluated events and transactions occurring subsequent to the balance sheet date of June 30, 2012, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were issued.

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Fair Value Measurements (Fair Value Inputs, Assets, Quantitative Information) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreclosed assets held for resale	$ 1,537	$ 931
Fair Value Estimate[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	4,625
Foreclosed assets held for resale	106
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	4,625	5,621
Foreclosed assets held for resale	$ 106	$ 240

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Investment Securities (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Investment Securities [Abstract]
Available-for-sale Securities Pledged as Collateral	$ 45,155,000		$ 45,155,000		$ 85,591,000
Available-for-sale Securities, Gross Realized Gains	10,000	0	26,000	0
Available-for-sale Securities, Gross Realized Losses	$ 0	$ 0	$ 0	$ 0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	50		50		45
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Severity			Mid Penn had 50 debt securities from separate issuers with unrealized losses. These securities have depreciated 1.09% from their amortized cost basis		45 debt securities with unrealized losses had depreciated 1.37% from the amortized cost basis.
Average Life of Mortgage-backed Securities	1 year 8 months 7 days		1 year 8 months 7 days

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income, Net of Taxes [Abstract]

Accumulated Other Comprehensive Income, Net of Taxes [Table Text Block]

(Dollars in thousands)	Unrealized Gain on Securities	Defined Benefit Plan Liability	Accumulated Other Comprehensive Income
Balance - June 30, 2012	$            2,408	$             (130)	$             2,278
Balance - December 31, 2011	$            2,044	$             (128)	$             1,916

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Fair Value Measurements (Fair Value, by Balance Sheet Grouping) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest-bearing time deposits with other financial institutions	$ 24,848	$ 27,477
Net loans and leases	479,397	475,945
Accrued interest receivable	2,980	3,067
Short-term borrowings	3,445
Accrued interest payable	1,102	1,064
Total Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	10,216	17,841
Interest-bearing time deposits with other financial institutions	24,848	27,477
Investment Securities	148,107	159,043
Net loans and leases	479,397	475,945
Restricted investment in bank stocks	2,817	3,120
Accrued interest receivable	2,980	3,067
Mortgage Servicing Rights	199	173
Deposits	610,414	634,055
Short-term borrowings	3,445
Long-term debt	22,606	22,701
Accrued interest payable	1,102	1,064
Fair Value Estimate[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	10,216	17,841
Interest-bearing time deposits with other financial institutions	24,848	27,477
Investment Securities	148,107	159,043
Net loans and leases		498,029
Restricted investment in bank stocks	2,817	3,120
Accrued interest receivable	2,980	3,067
Mortgage Servicing Rights	160	123
Deposits		644,474
Short-term borrowings
Long-term debt		24,609
Accrued interest payable	1,102	1,064
Standby Letters Of Credit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability	9,601	7,320
Standby Letters Of Credit [Member] | Total Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability
Standby Letters Of Credit [Member] | Fair Value Estimate[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability
Commitments to Extend Credit [Member] | Total Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability
Commitments to Extend Credit [Member] | Fair Value Estimate[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Liability

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Investment Securities (Unrealized Gain (Loss) on Investments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Investments [Line Items]
Amortized Cost	$ 144,434	$ 155,947
Unrealized Gains	4,203	3,828
Unrealized Losses	530	732
Fair Value	148,107	159,043
U.S. Treasury and U.S. government agencies [Member]
Schedule of Investments [Line Items]
Amortized Cost	24,051	26,116
Unrealized Gains	1,547	1,501
Unrealized Losses
Fair Value	25,598	27,617
Mortgage-backed U.S. government agencies [Member]
Schedule of Investments [Line Items]
Amortized Cost	70,232	82,777
Unrealized Gains	526	491
Unrealized Losses	410	600
Fair Value	70,348	82,668
State and political subdivision obligations [Member]
Schedule of Investments [Line Items]
Amortized Cost	49,751	46,654
Unrealized Gains	2,130	1,836
Unrealized Losses	112	124
Fair Value	51,769	48,366
Equity securities [Member]
Schedule of Investments [Line Items]
Amortized Cost	400	400
Unrealized Gains
Unrealized Losses	8	8
Fair Value	$ 392	$ 392

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Investment Securities (Schedule of Unrealized Loss on Investments) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Investments [Line Items]
Less than 12 Months: Fair Value	$ 42,982	$ 50,868
Less than 12 Months: Unrealized Losses	413	642
12 Months or More: Fair Value	5,305	1,931
12 Months or More: Unrealized Losses	117	90
Total: Fair Value	48,287	52,799
Total: Unrealized Losses	530	732
Mortgage-backed U.S. government agencies [Member]
Schedule of Investments [Line Items]
Less than 12 Months: Fair Value	38,347	46,497
Less than 12 Months: Unrealized Losses	355	593
12 Months or More: Fair Value	3,715	370
12 Months or More: Unrealized Losses	55	7
Total: Fair Value	42,062	46,867
Total: Unrealized Losses	410	600
State and political subdivision obligations [Member]
Schedule of Investments [Line Items]
Less than 12 Months: Fair Value	4,635	4,371
Less than 12 Months: Unrealized Losses	58	49
12 Months or More: Fair Value	1,198	1,169
12 Months or More: Unrealized Losses	54	75
Total: Fair Value	5,833	5,540
Total: Unrealized Losses	112	124
Equity securities [Member]
Schedule of Investments [Line Items]
Less than 12 Months: Fair Value
Less than 12 Months: Unrealized Losses
12 Months or More: Fair Value	392	392
12 Months or More: Unrealized Losses	8	8
Total: Fair Value	392	392
Total: Unrealized Losses	$ 8	$ 8

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating Activities:
Net Income	$ 2,494	$ 2,059
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan and lease losses	525	750
Depreciation	546	630
Amortization of intangibles	5	43
Net amortization of securities premiums	175	1,532
Gain on sales of investment securities	(26)
Earnings on cash surrender value of life insurance	(124)	(130)
Loss on disposal of bank premises and equipment	1
Loss (gain) on sale / write-down of foreclosed assets	58	(59)
Deferred income tax expense (benefit)	171	(292)
Decrease (increase) in accrued interest receivable	87	(37)
Decrease in other assets	516	1,928
Increase in accrued interest payable	38	658
(Decrease) increase in other liabilities	(475)	39
Net Cash Provided by Operating Activities	3,991	7,121
Investing Activities:
Net decrease (increase) in interest-bearing balances	2,629	(1,072)
Proceeds from the maturity of investment securities	16,587	9,008
Proceeds from the sale of investment securities	7,717
Purchases of investment securities	(12,940)	(49,689)
Redemptions of restricted investment in bank stock	303	372
Net increase in loans and leases	(5,842)	(13,152)
Purchases of bank premises and equipment	(452)	(734)
Proceeds from the sale of bank premises and equipment	42
Proceeds from sale of foreclosed assets	1,201	477
Net Cash Provided by (Used in) Investing Activities	9,245	(54,790)
Financing Activities:
Net (decrease) increase in demand deposits and savings accounts	(551)	53,514
Net decrease in time deposits	(23,090)	(2,450)
Net decrease in short-term borrowings	3,445	361
Preferred stock dividend paid	(250)	(250)
Common stock dividend paid	(348)	(348)
Employee Stock Purchase Plan	28	18
Long-term debt repayment	(95)	(5,090)
Net Cash (Used in) Provided by Financing Activities	(20,861)	45,755
Net decrease in cash and cash equivalents	(7,625)	(1,914)
Cash and cash equivalents, beginning of period	17,841	12,901
Cash and cash equivalents, end of period	10,216	10,987
Supplemental Disclosures of Cash Flow Information:
Interest paid	3,857	4,297
Income taxes paid	1,085	565
Supplemental Noncash Disclosures:
Loan transfers to foreclosed assets held for sale	$ 1,865	$ 406

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Investment Securities (Investments Classified by Contractual Maturity Date) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of Investments [Line Items]
Available-for-sale Securities, Debt Maturities, within One Year, Amortized Cost Basis	$ 325
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Amortized Cost Basis	25,965
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Amortized Cost Basis	17,966
Available-for-sale Securities, Debt Maturities, after Ten Years, Amortized Cost Basis	29,546
Amortized Costs of Avaiable for Sale Securities with Specified Matuirty Date	73,802
Equity Securities, Amortized Cost	400
Available-for-sale Securities, Amortized Cost Basis	144,434	155,947
Available-for-sale Securities, Debt Maturities, within One Year, Fair Value	334
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value	27,422
Available-for-sale Securities, Debt Maturities, after Five Through Ten Years, Fair Value	19,118
Available-for-sale Securities, Debt Maturities, after Ten Years, Fair Value	30,493
Avaiable for Sale Securities with Specified Matuirty Date	77,367
Equity Securities, Fair Value	392
Available for sale Securities, Fair Value	148,107	159,043
Mortgage-backed securities [Member]
Schedule of Investments [Line Items]
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis	70,232
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value	$ 70,348

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Loans and Allowance for Loan and Lease Losses (Troubled Debt Restructurings) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Financing Receivable, Modifications [Line Items]
Recorded Investment	$ 3,985	$ 4,602
Commercial and industrial [Member]
Financing Receivable, Modifications [Line Items]
Pre-Modification Outstanding Recorded Investments	40	40
Post-Modification Outstanding Recorded Investments	35	35
Recorded Investment	31	32
Commercial real estate [Member]
Financing Receivable, Modifications [Line Items]
Pre-Modification Outstanding Recorded Investments	951	8,315
Post-Modification Outstanding Recorded Investments	4,314	4,568
Recorded Investment	3,497	3,955
Residential mortgage [Member]
Financing Receivable, Modifications [Line Items]
Pre-Modification Outstanding Recorded Investments	558	698
Post-Modification Outstanding Recorded Investments	552	691
Recorded Investment	457	599
Home equity [Member]
Financing Receivable, Modifications [Line Items]
Pre-Modification Outstanding Recorded Investments		29
Post-Modification Outstanding Recorded Investments		28
Recorded Investment		$ 16

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash and due from banks	$ 9,070	$ 9,847
Interest-bearing balances with other financial institutions	1,146	1,555
Federal funds sold		6,439
Total cash and cash equivalents	10,216	17,841
Interest-bearing time deposits with other financial institutions	24,848	27,477
Available for sale investment securities	148,107	159,043
Loans and leases, net of unearned interest	485,982	482,717
Less: Allowance for loan and lease losses	(6,585)	(6,772)
Net loans and leases	479,397	475,945
Bank premises and equipment, net	13,187	13,324
Restricted investment in bank stocks	2,817	3,120
Foreclosed assets held for sale	1,537	931
Accrued interest receivable	2,980	3,067
Deferred income taxes	2,053	2,439
Goodwill	1,016	1,016
Core deposit and other intangibles, net	269	274
Cash surrender value of life insurance	8,020	7,896
Other assets	2,487	3,010
Total Assets	696,934	715,383
LIABILITIES & SHAREHOLDERS' EQUITY
Deposits: Noninterest bearing demand	47,354	73,261
Deposits: Interest bearing demand	133,675	59,403
Deposits: Money Market	221,694	271,521
Deposits: Savings	28,889	27,978
Deposits: Time	178,802	201,892
Total Deposits	610,414	634,055
Short-term borrowings	3,445
Long-term debt	22,606	22,701
Accrued interest payable	1,102	1,064
Other liabilities	3,636	4,111
Total Liabilities	641,203	661,931
Shareholders' Equity:
Preferred stock, par value $1,000; authorized 10,000,000 shares; 5% cumulative dividend; 10,000 shares issued and outstanding at June 30, 2012 and December 31, 2011	10,000	10,000
Common stock, par value $1 per share; 10,000,000 shares authorized; 3,487,130 shares issued and outstanding at June 30, 2012 and 3,484,509 at December 31, 2011	3,487	3,484
Additional paid-in capital	29,848	29,830
Retained earnings	10,118	8,222
Accumulated other comprehensive income	2,278	1,916
Total Shareholders' Equity	55,731	53,452
Total Liabilities and Shareholders' Equity	$ 696,934	$ 715,383

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Fair Value Measurements (Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net loans and leases	$ 479,397	$ 475,945
Total Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net loans and leases	479,397	475,945
Mortgage Servicing Rights	199	173
Short-term borrowings	3,445
Deposits	610,414	634,055
Long-term debt	22,606	22,701
Fair Value Estimate[Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net loans and leases		498,029
Mortgage Servicing Rights	160	123
Deposits		644,474
Long-term debt		24,609
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net loans and leases
Mortgage Servicing Rights
Short-term borrowings
Deposits
Long-term debt
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net loans and leases
Mortgage Servicing Rights	160
Short-term borrowings
Deposits
Long-term debt
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net loans and leases
Mortgage Servicing Rights
Short-term borrowings
Deposits
Long-term debt

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statements of Comprehensive Income (Parenthetical) [Abstract]
Unrealized gains arising during the period on available for sale securities, tax	$ 149	$ 620	$ 196	$ 722
Reclassification adjustment for net gain on sales of available for sale securities included in net income, tax	(4)		(9)
Change in defined benefit plans, tax	$ 10	$ 1	$ (1)	$ 2

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Loans and Allowance for Loan and Lease Losses (Impaired Loans by Loan Portfolio Class) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Commercial and industrial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	$ 233	$ 463
Impaired Loans with No Allowance: Unpaid Principal Balance	1,234	1,382
Impaired Loans with Allowance: Recorded Investment	636	656
Impaired Loans with Allowance: Unpaid Principal Balance	773	792
Impaired Loans with Allowance: Related Allowance	348	451
Impaired Loans: Total Recorded Investment	869	1,119
Impaired Loans: Total Unpaid Principal Balance	2,007	2,174
Commercial real estate [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	7,465	4,473
Impaired Loans with No Allowance: Unpaid Principal Balance	11,100	6,543
Impaired Loans with Allowance: Recorded Investment	1,819	4,425
Impaired Loans with Allowance: Unpaid Principal Balance	1,944	6,163
Impaired Loans with Allowance: Related Allowance	1,189	1,380
Impaired Loans: Total Recorded Investment	9,284	8,898
Impaired Loans: Total Unpaid Principal Balance	13,044	12,706
Commercial real estate - construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment		584
Impaired Loans with No Allowance: Unpaid Principal Balance		592
Impaired Loans with Allowance: Related Allowance
Impaired Loans: Total Recorded Investment		584
Impaired Loans: Total Unpaid Principal Balance		592
Home equity [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Recorded Investment	34	251
Impaired Loans with No Allowance: Unpaid Principal Balance	42	386
Impaired Loans with Allowance: Recorded Investment	72	74
Impaired Loans with Allowance: Unpaid Principal Balance	75	77
Impaired Loans with Allowance: Related Allowance	13	15
Impaired Loans: Total Recorded Investment	106	325
Impaired Loans: Total Unpaid Principal Balance	117	463
Consumer [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with Allowance: Recorded Investment	585
Impaired Loans with Allowance: Unpaid Principal Balance	585
Impaired Loans with Allowance: Related Allowance	450
Impaired Loans: Total Recorded Investment	585
Impaired Loans: Total Unpaid Principal Balance	$ 585

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Loans and Allowance for Loan and Lease Losses (Policy)

6 Months Ended

Jun. 30, 2012

Loans and Allowance for Loan and Lease Losses [Abstract]

Lease Financing [Policy Text Block]

Lease financing

Mid Penn originates leases for select commercial and state and municipal government lessees. The nature of the leased asset is often subject to rapid depreciation in salvage value over a relatively short time frame or may be of an industry specific nature, making appraisal or liquidation of the asset difficult. These factors have led the Bank to severely curtail the origination of new leases to state or municipal government agencies where default risk is extremely limited and to only the most credit-worthy commercial customers. These commercial customers are primarily leasing fleet vehicles for use in their primary line of business, mitigating some of the asset value concerns within the portfolio. Leasing has been a declining percentage of the Mid Penn's portfolio, currently representing 0.35% of outstanding loans.

Allowance for Loan Losses [Policy Text Block]

The allowance for credit losses consists of the allowance for loan and lease losses and the reserve for unfunded lending commitments. The allowance for loan and lease losses represents management's estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management's estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheet. The allowance for loan and lease losses is increased by the provision for loan and lease losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan and lease losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely.  Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of Bankruptcy, or if there is an amount deemed uncollectible.  Because all identified losses are immediately charged off, no portion of the allowance for loan and lease losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance for credit losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a monthly evaluation of the adequacy of the allowance. The allowance is based on Mid Penn's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential real estate, home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include changes in economic conditions, fluctuations in loan quality measures, changes in the experience of the lending staff and loan review systems, growth or changes in the mix of loans originated, and shifting industry or portfolio concentrations.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management's best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

Impaired Loans [Policy Text Block]

Mid Penn considers a commercial loan (consisting of commercial and industrial, commercial real estate, commercial real estate-construction, and lease financing loan classes) to be impaired when it becomes 90 days or more past due and not in the process of collection. This methodology assumes the borrower cannot or will not continue to make additional payments. At that time the loan would be considered collateral dependent as the discounted cash flow ("DCF") method indicates no operating income is available for evaluating the collateral position; therefore, all impaired loans are deemed to be collateral dependent.

In addition, Mid Penn's rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn's impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

Mid Penn evaluates loans for charge-off on a monthly basis. Policies that govern the recommendation for charge-off are unique to the type of loan being considered. Commercial loans rated as nonaccrual or lower will first have a collateral evaluation completed in accordance with the guidance on impaired loans. Once the collateral evaluation has been completed, a specific allocation of allowance is made based upon the results of the evaluation. In the event the loan is unsecured, the loan would have been charged-off at the recognition of impairment. If the loan is secured, it will undergo a 90 day waiting period to ensure the collateral shortfall identified in the evaluation is accurate and then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). Commercial loans secured by real estate rated as impaired will also have an initial collateral evaluation completed in accordance with the guidance on impaired loans. An updated real estate valuation is ordered and the collateral evaluation is modified to reflect any variations in value. A specific allocation of allowance is made for any anticipated collateral shortfall and a 90 day waiting period begins to ensure the accuracy of the collateral shortfall. The loan is then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). The process of charge-off for residential mortgage loans begins upon a loan becoming delinquent for 90 days and not in the process of collection. The existing appraisal is reviewed and a lien search is obtained to determine lien position and any instances of intervening liens. A new appraisal of the property will be ordered if deemed necessary by management and a collateral evaluation is completed. The loan will then be charged down to the value indicated in the evaluation. Consumer loans (including home equity loans and other consumer loans) are recommended for charge-off after reaching delinquency of 90 days and the loan is not in the process of collection. The entire balance of the consumer loan is recommended for charge-off at this point.

As noted above, Mid Penn assesses a specific allocation for commercial loans prior to reducing the carrying value or charging off the loan. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). In addition, Mid Penn takes a preemptive step when any commercial loan becomes classified under its internal classification system. A preliminary collateral evaluation in accordance with the guidance on impaired loans is prepared using the existing collateral information in the loan file. This process allows Mid Penn to review both the credit and documentation files to determine the status of the information needed to make a collateral evaluation. This collateral evaluation is preliminary but allows Mid Penn to determine if any potential collateral shortfalls exist.

It is Mid Penn's policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation. The credit department employs an electronic tracking system to monitor the receipt of and need for updated appraisals. To date, there have been no significant time lapses noted with the above processes.

In some instances Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment.  In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value.  The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management.  Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales.  Management reviews the estimates of these third parties and discounts them accordingly based on management's judgment, if deemed necessary.  

For impaired loans with no valuation allowance required, Mid Penn's practice of obtaining independent third party market valuations on the subject property within 30 days of being placed on non-accrual status sometimes indicates that the loan to value ratio is sufficient to obviate the need for a specific allocation in spite of significant deterioration in real estate values in Mid Penn's primary market area. These circumstances are determined on a case by case analysis of the impaired loans.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party.

Mid Penn does not currently, or plan in the future to, use automated valuation methodologies as a method of valuing real estate collateral.

An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, Mid Penn does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

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Loans and Allowance for Loan and Lease Losses (Average Of Impaired Loans And Related Interest Income By Loan Portfolio Class) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Commercial and industrial [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	$ 468	$ 972	$ 473	$ 1,033
Impaired Loans with No Allowance: Interest Income		84		84
Impaired Loans with Allowance: Average Recorded Investment	656	459	657	476
Impaired Financing Receivable, Average Recorded Investment, Total	1,124	1,431	1,130	1,509
Impaired Financing Receivable, Interest Income Recognized, Total		84		84
Commercial real estate [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	7,894	4,583	7,942	6,003
Impaired Loans with No Allowance: Interest Income		264		265
Impaired Loans with Allowance: Average Recorded Investment	1,865	3,593	1,876	3,748
Impaired Financing Receivable, Average Recorded Investment, Total	9,759	8,176	9,818	9,751
Impaired Financing Receivable, Interest Income Recognized, Total		264		265
Commercial real estate - construction [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment		844		1,249
Impaired Loans with No Allowance: Interest Income		18		18
Impaired Financing Receivable, Average Recorded Investment, Total		844		1,249
Impaired Financing Receivable, Interest Income Recognized, Total		18		18
Lease financing [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment		150		162
Impaired Financing Receivable, Average Recorded Investment, Total		150		162
Residential mortgage [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment		69		71
Impaired Loans with No Allowance: Interest Income		11		12
Impaired Financing Receivable, Average Recorded Investment, Total		69		71
Impaired Financing Receivable, Interest Income Recognized, Total		11		12
Home equity [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with No Allowance: Average Recorded Investment	34	265	35	271
Impaired Loans with No Allowance: Interest Income	4		4
Impaired Loans with Allowance: Average Recorded Investment	73	20	73	24
Impaired Financing Receivable, Average Recorded Investment, Total	107	285	108	295
Impaired Financing Receivable, Interest Income Recognized, Total	4		4
Consumer [Member]
Financing Receivable, Impaired [Line Items]
Impaired Loans with Allowance: Average Recorded Investment	585		585
Impaired Financing Receivable, Average Recorded Investment, Total	$ 585		$ 585

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2012

Investment Securities [Abstract]

Unrealized Gain (Loss) on Investments [Table Text Block]

(Dollars in thousands)
		Amortized	Unrealized	Unrealized	Fair
		Cost	Gains	Losses	Value
June 30, 2012
Available-for-sale securities:
	U.S. Treasury and U.S. government agencies	$        24,051	$        1,547	$                -	$        25,598
	Mortgage-backed U.S. government agencies	70,232	526	410	70,348
	State and political subdivision obligations	49,751	2,130	112	51,769
	Equity securities	400	-	8	392
		$       144,434	$        4,203	$           530	$      148,107
(Dollars in thousands)
		Amortized	Unrealized	Unrealized	Fair
		Cost	Gains	Losses	Value
December 31, 2011
Available for sale securities:
	U.S. Treasury and U.S. government agencies	$        26,116	$        1,501	$                -	$        27,617
	Mortgage-backed U.S. government agencies	82,777	491	600	82,668
	State and political subdivision obligations	46,654	1,836	124	48,366
	Equity securities	400	-	8	392
		$       155,947	$         3,828	$           732	$      159,043

Schedule of Unrealized Loss on Investments [Table Text Block]

(Dollars in thousands)		Less Than 12 Months		12 Months or More		Total
June 30, 2012		Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
		Value	Losses	Value	Losses	Value	Losses
Available-for-sale securities:
	Mortgage-backed U.S. government agencies	$38,347	$        355	$  3,715	$        55	$42,062	$        410
	State and political subdivision obligations	4,635	58	1,198	54	5,833	112
	Equity securities			392	8	392	8
	Total temporarily impaired
	available for sale securities	$42,982	$        413	$  5,305	$      117	$48,287	$        530
(Dollars in thousands)		Less Than 12 Months		12 Months or More		Total
December 31, 2011		Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
		Value	Losses	Value	Losses	Value	Losses
Available-for-sale securities:
	Mortgage-backed U.S. government agencies	$46,497	$        593	$    370	$          7	$46,867	$        600
	State and political subdivision obligations	4,371	49	1,169	75	5,540	124
	Equity securities	-	-	392	8	392	8
	Total temporarily impaired
	available for sale securities	$50,868	$        642	$  1,931	$        90	$52,799	$        732

Investments Classified by Contractual Maturity Date [Table Text Block]

(Dollars in thousands)	June 30, 2012
	Amortized	Fair
	Cost	Value
Due in 1 year or less	$         325	$         334
Due after 1 year but within 5 years	25,965	27,422
Due after 5 years but within 10 years	17,966	19,118
Due after 10 years	29,546	30,493
	73,802	77,367
Mortgage-backed securities	70,232	70,348
Equity securities	400	392
	$  144,434	$  148,107

XML

Consolidated Statement of Changes In Shareholder's Equity (USD $) In Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Total
Balance at Dec. 31, 2010	$ 10,000	$ 3,480	$ 29,810	$ 4,875	$ 36	$ 48,201
Net income				2,059		2,059
Total other comprehensive income, net of taxes					1,406	1,406
Cash dividends				(348)		(348)
Employee Stock Purchase Plan		2	16			18
Preferred Dividends				(250)		(250)
Amortization of warrant cost			(7)			(7)
Balance at Jun. 30, 2011	10,000	3,482	29,819	6,336	1,442	51,079
Balance at Dec. 31, 2011	10,000	3,484	29,830	8,222	1,916	53,452
Net income				2,494		2,494
Total other comprehensive income, net of taxes					362	362
Cash dividends				(348)		(348)
Employee Stock Purchase Plan		3	25			28
Preferred Dividends				(250)		(250)
Amortization of warrant cost			(7)			(7)
Balance at Jun. 30, 2012	$ 10,000	$ 3,487	$ 29,848	$ 10,118	$ 2,278	$ 55,731

XML

Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 1,000	$ 1,000
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock Dividend Rate Percent	5.00%	5.00%
Preferred Stock, Shares Issued	10,000,000	10,000,000
Preferred Stock, Shares Outstanding	10,000,000	10,000,000
Common Stock, Par or Stated Value Per Share	$ 1	$ 1
Common Stock, Shares Authorized	10,000,000	10,000,000
Common Stock, Shares, Issued	3,487,130	3,484,509
Common Stock, Shares, Outstanding	3,487,130	3,484,509

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Income [Abstract]

Accumulated Other Comprehensive Income

9. Accumulated Other Comprehensive Income

The components of accumulated other comprehensive income, net of taxes are as follows:

(Dollars in thousands)	Unrealized Gain on Securities	Defined Benefit Plan Liability	Accumulated Other Comprehensive Income
Balance - June 30, 2012	$            2,408	$             (130)	$             2,278
Balance - December 31, 2011	$            2,044	$             (128)	$             1,916

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 14, 2012
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2012
Entity Registrant Name	MID PENN BANCORP INC
Entity Central Index Key	0000879635
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		3,487,130

XML

Preferred Stock

6 Months Ended

Jun. 30, 2012

Preferred Stock

Preferred Stock

10. Preferred Stock

On December 19, 2008, Mid Penn entered into and closed a Letter Agreement with the United States Department of the Treasury (the "Treasury") pursuant to which the Treasury invested $10,000,000 in Mid Penn under the Treasury's Capital Purchase Program (the "CPP").

Under the CPP, the Treasury received (1) 10,000 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock, $1,000 liquidation preference, and (2) Warrants to purchase up to 73,099 shares of Mid Penn's common stock at an exercise price of $20.52 per share. The $10,000,000 in new capital is treated as Tier 1 Capital.

The Series A Preferred Stock pays cumulative dividends at a rate of 5% per annum for the first five years and 9% per annum thereafter.Pursuant to the American Recovery and Reinvestment Act of 2009, the Secretary of the Treasury is required to permit, subject to consultation with the appropriate Federal banking agency, Mid Penn to redeem the Series A Preferred Stock. Mid Penn may do so without regard to the source of the funds to be used to redeem the Series A Preferred Stock or any minimum waiting period. Upon redemption of the Series A Preferred Stock, the Secretary of the Treasury must liquidate the warrants associated with Mid Penn's participation in the CPP at the current market price. Upon the appropriate approval, Mid Penn may redeem the Series A Preferred Stock at the original purchase price plus accrued but unpaid dividends, if any. The related Warrants expire in ten years and are immediately exercisable upon their issuance.

To participate in the program, Mid Penn is required to meet certain standards, including; (1) ensuring that incentive compensation for senior executives does not encourage unnecessary and excessive risk that threaten the value of Mid Penn; (2) requiring a clawback of any bonus or incentive compensation paid to a senior executive based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate; (3) prohibiting Mid Penn from making any golden parachute payment to specified senior executives; and (4) agreeing not to deduct for tax purposes executive compensation in excess of $500,000 for each senior executive.

Based on the Program term sheet provided by the Treasury, the following are the effects on holders of common stock from the issuance of Senior Preferred stock to the Treasury under the Program:

Restrictions on Dividends and Repurchases

For as long as any Senior Preferred shares are outstanding, no dividends can be declared or paid on common shares, nor can Mid Penn repurchase or redeem any common shares, unless all accrued and unpaid dividends for all past dividend periods on the Senior Preferred shares have been fully paid.

Voting Rights

The Senior Preferred shares are non-voting, other than class voting rights on (1) any authorization or issuance of shares ranking senior to the Senior Preferred shares, (2) any amendment to the rights of Senior Preferred, or (3) any merger, exchange or similar transaction which would adversely affect the rights of the Senior Preferred. If dividends on the Senior Preferred shares are not paid in full for six dividend periods, whether or not consecutive, the Senior Preferred shareholder(s) have the right to elect two directors. The right to elect directors would end when full dividends have been paid for four consecutive dividend periods.

XML

Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
INTEREST INCOME
Interest & fees on loans and leases	$ 7,085	$ 7,284	$ 13,876	$ 14,019
Interest on interest-bearing balances time deposits with financial institutions	60	155	125	317
Interest and dividends on investment securities:
U.S. Treasury and government agencies	329	325	765	547
State and political subdivision obligations, tax exempt	404	302	813	625
Other securities	5	3	10	6
Interest on federal funds sold and securities purchased under agreements to resell	2	6	6	14
Total Interest Income	7,885	8,075	15,595	15,528
INTEREST EXPENSE
Interest on deposits	1,618	2,241	3,407	4,436
Interest on short-term borrowings	1	1	1	3
Interest on long-term debt	243	243	487	516
Total Interest Expense	1,862	2,485	3,895	4,955
Net Interest Income	6,023	5,590	11,700	10,573
PROVISION FOR LOAN AND LEASE LOSSES	225	550	525	750
Net Interest Income After Provision for Loan and Lease Losses	5,798	5,040	11,175	9,823
NONINTEREST INCOME
Income from fiduciary activities	189	115	301	210
Service charges on deposits	136	189	265	372
Net gain on sales of investment securities	10		26
Earnings from cash surrender value of life insurance	62	65	124	130
Mortgage banking income	137	80	259	203
Other income	397	256	694	548
Total Noninterest Income	931	705	1,669	1,463
NONINTEREST EXPENSE
Salaries and employee benefits	2,619	2,401	5,215	4,602
Occupancy expense, net	257	244	535	552
Equipment expense	286	318	580	662
Pennsylvania Bank Shares tax expense	128	121	259	242
FDIC Assessment	302	217	603	531
Legal and professional fees	138	141	245	228
Director fees and benefits expense	88	72	135	145
Marketing and advertising expense	128	95	197	158
Computer expense	161	163	323	329
Telephone expense	103	92	210	186
Loss (gain) on sale/write-down of foreclosed assets	50	(31)	58	(59)
Intangible amortization	15	17	31	33
Loan collection costs	39	50	148	91
Other expenses	633	508	1,146	1,008
Total Noninterest Expense	4,947	4,408	9,685	8,708
INCOME BEFORE PROVISION FOR INCOME TAXES	1,782	1,337	3,159	2,578
Provision for income taxes	422	278	665	519
NET INCOME	1,360	1,059	2,494	2,059
Preferred stock dividends and discount accretion	129	129	257	257
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$ 1,231	$ 930	$ 2,237	$ 1,802
PER COMMON SHARE DATA:
Basic Earnings Per Common Share	$ 0.35	$ 0.27	$ 0.64	$ 0.52
Diluted Earnings Per Common Share	$ 0.35	$ 0.27	$ 0.64	$ 0.52
Cash Dividends	$ 0.05	$ 0.05	$ 0.1	$ 0.1

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2012

Fair Value Measurement [Abstract]

Fair Value Measurements

4. Fair Value Measurements

Fair value measurement and disclosure guidance defines fair value as the price that would be received to sell the asset or transfer the liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. This guidance provides additional information on determining when the volume and level of activity for the asset or liability has significantly decreased. The guidance also includes information on identifying circumstances when a transaction may not be considered orderly.

Fair value measurement and disclosure guidance provides a list of factors that a reporting entity should evaluate to determine whether there has been a significant decrease in the volume and level of activity for the asset or liability in relation to normal market activity for the asset or liability. When the reporting entity concludes there has been a significant decrease in the volume and level of activity for the asset or liability, further analysis of the information from that market is needed and significant adjustments to the related prices may be necessary to estimate fair value in accordance with the fair value measurement and disclosure guidance.

This guidance clarifies that when there has been a significant decrease in the volume and level of activity for the asset or liability, some transactions may not be orderly. In those situations, the entity must evaluate the weight of the evidence to determine whether the transaction is orderly. The guidance provides a list of circumstances that may indicate that a transaction is not orderly. A transaction price that is not associated with an orderly transaction is given little, if any, weight when estimating fair value.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs to valuation techniques refer to the assumptions that market participants would use in pricing the asset or liability. Inputs may be observable, meaning those that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from independent sources, or unobservable, meaning those that reflect the reporting entity's own belief about the assumptions market participants would use in pricing the asset or liability based upon the best information available in the circumstances. Fair value measurement and disclosure guidance establishes a fair value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets that are accessible at the measurement date for

identical, unrestricted assets or liabilities;

Level 2 Inputs - Quoted prices in markets that are not active, or inputs that are observable either directly or

                                                  indirectly, for substantially the full term of the asset or liability;

Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value

                                                  measurement and unobservable (i.e., supported by little or no market activity).

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

There were no transfers of assets between fair value Level 1 and Level 2 for the six months ended June 30, 2012. The following table illustrates the assets measured at fair value on a recurring basis segregated by hierarchy fair value levels:

(Dollars in thousands)		Fair value measurements at June 30, 2012 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	June 30, 2012	(Level 1)	(Level 2)	(Level 3)
U.S. Treasury and U.S. government agencies	$                25,598	$                -	$        25,598	$                -
Mortgage-backed U.S. government agencies	70,348	-	70,348	-
State and political subdivision obligations	51,769	-	51,769	-
Equity securities	392	392	-	-
	$              148,107	$             392	$      147,715	$                -
(Dollars in thousands)		Fair value measurements at December 31, 2011 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	December 31, 2011	(Level 1)	(Level 2)	(Level 3)
U.S. Treasury and U.S. government agencies	$                27,617	$                -	$        27,617	$                -
Mortgage-backed U.S. government agencies	82,668	-	82,668	-
State and political subdivision obligations	48,366	-	48,366	-
Equity securities	392	392	-	-
	$              159,043	$             392	$      158,651	$                -

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment).

The following table illustrates the assets measured at fair value on a nonrecurring basis segregated by hierarchy fair value levels:

(Dollars in thousands)		Fair value measurements at June 30, 2012 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	June 30, 2012	(Level 1)	(Level 2)	(Level 3)
Impaired Loans	$                  4,625	$                -	$                -	$          4,625
Foreclosed Assets Held for Sale	106	-	-	106
(Dollars in thousands)		Fair value measurements at December 31, 2011 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	December 31, 2011	(Level 1)	(Level 2)	(Level 3)
Impaired Loans	$                  5,621	$                -	$                -	$          5,621
Foreclosed Assets Held for Sale	240	-	-	240

The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Mid Penn has utilized Level 3 inputs to determine the fair value:

(Dollars in thousands)		Quantitative Information about Level 3 Fair Value Measurements
June 30, 2012		Fair Value Estimate	Valuation Technique	Unobservable Input	Range
Impaired Loans		$             4,625	Appraisal of collateral (1)	Appraisal adjustments (2)	10% - 30%
Foreclosed Assets Held for Sale		106	Appraisal of collateral (1), (3)	Appraisal adjustments (2)	10% - 30%
(1)	Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level 3 inputs which are not identifiable.
(2)	Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
(3)	Includes qualitative adjustments by management and estimated liquidation expenses.

ASC Topic 825, Financial Instruments, requires disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements.

The following methodologies and assumptions were used to estimate the fair value of Mid Penn's assets and liabilities:

Cash and Cash Equivalents:

The carrying value of cash and cash equivalents is considered to be a reasonable estimate of fair value.

Interest-bearing Balances with other Financial Institutions:

The estimate of fair value was determined by comparing the present value of quoted interest rates on like deposits with the weighted average yield and weighted average maturity of the balances.

Securities Available for Sale:

The fair value of securities classified as available for sale is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (level 2), 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

Impaired Loans:

Mid Penn's rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn's impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

It is Mid Penn's policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation.

In some instances Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment.  In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value.  The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management.  Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales.  Management reviews the estimates of these third parties and discounts them accordingly based on management's judgment, if deemed necessary.   Mid Penn considers the estimates used in its impairment analysis to be Level 3 inputs.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party. Mid Penn does not currently, or plan to in the future, use automated valuation methodologies as a method of valuing real estate collateral.

.

Loans:

For variable-rate loans that reprice frequently and which entail no significant changes in credit risk, carrying values approximated fair value. The fair value of other loans are estimated by calculating the present value of the cash flow difference between the current rate and the market rate, for the average maturity, discounted quarterly at the market rate.

Foreclosed Assets Held for Sale:

Assets included in foreclosed assets held for sale are carried at fair value and accordingly is presented as measured on a non-recurring basis. Values are estimated using Level 3 inputs, based on appraisals that consider the sales prices of property in the proximate vicinity.

Accrued Interest Receivable and Payable:

The carrying amount of accrued interest receivable and payable approximates their fair values.

Restricted Investment in Bank Stocks:

The carrying amount of required and restricted investment in correspondent bank stock approximates fair value, and considers the limited marketability of such securities.

Mortgage Servicing Rights:

The fair value of servicing rights is based on the present value of estimated future cash flows on pools of mortgages by rate and maturity date.

Deposits:

The fair value for demand deposits (e.g., interest and noninterest checking, savings, and money market deposit accounts) is by definition, equal to the amount payable on demand at the reporting date (i.e. their carrying amounts). Fair value for fixed-rate certificates of deposit was estimated using a discounted cash flow calculation by combining all fixed-rate certificates into a pool with a weighted average yield and a weighted average maturity for the pool and comparing the pool with interest rates currently being offered on a similar maturity.

Short-term Borrowings:

Because of time to maturity, the estimated fair value of short-term borrowings approximates the book value.

Long-term Debt:

The estimated fair values of long-term debt were determined using discounted cash flow analysis, based on currently available borrowing rates for similar types of borrowing arrangements.

Commitments to Extend Credit and Letters of Credit:

The fair value of commitments to extend credit is estimated using the fees currently charged to enter into similar agreements, taking into account market interest rates, the remaining terms and present credit worthiness of the counterparties. The fair value of guarantees and letters of credit is based on fees currently charged for similar agreements.

The following table summarizes the carrying value and fair value of assets and liabilities at June 30, 2012 and December 31, 2011.

(Dollars in thousands)		June 30, 2012		December 31, 2011
		Carrying	Fair	Carrying	Fair
		Value	Value	Value	Value
Financial assets:
	Cash and cash equivalents	$        10,216	$        10,216	$        17,841	$        17,841
	Interest-bearing balances with other financial institutions	24,848	24,848	27,477	27,477
	Investment securities	148,107	148,107	159,043	159,043
	Net loans and leases	479,397		475,945	498,029
	Restricted investment in bank stocks	2,817	2,817	3,120	3,120
	Accrued interest receivable	2,980	2,980	3,067	3,067
	Mortgage servicing rights	199	160	173	123
Financial liabilities:
	Deposits	$      610,414		$      634,055	$      644,474
	Short-term borrowings	3,445		-	-
	Long-term debt	22,606		22,701	24,609
	Accrued interest payable	1,102	1,102	1,064	1,064
Off-balance sheet financial instruments:
	Commitments to extend credit	$                -	$                -	$                -	$                -
	Financial standby letters of credit	-	-	-	-

The following presents the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn's financial instruments as of June 30, 2012. This table excludes financial instruments for which the carrying amount approximates fair value.

			Fair Value Measurements
			Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)	Significant Other Observable Inputs        (Level 2)	Significant Unobservable Inputs        (Level 3)
(Dollars in thousands)	Carrying Amount	Fair Value
June 30, 2012
Financial instruments - assets
Net loans and leases	479,397		$                  -	$                  -
Mortgage servicing rights	199	160	-	160	-
Financial instruments - liabilities
Deposits	$     610,414		-		-
Short-term borrowings	3,445		-		-
Long-term debt	22,606		-		-

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Loans and Allowance for Loan and Lease Losses

6 Months Ended

Jun. 30, 2012

Loans and Allowance for Loan and Lease Losses [Abstract]

Loans and Allowance for Loan and Lease Losses

3. Loans and Allowance for Loan and Lease Losses

Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at their outstanding unpaid principal balances, net of an allowance for loan losses and any deferred fees or costs. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the yield (interest income) of the related loans. These amounts are generally being amortized over the contractual life of the loan. Premiums and discounts on purchased loans are amortized as adjustments to interest income using the effective yield method.

The loan portfolio is segmented into commercial and consumer loans. Commercial loans consist of the following classes: commercial and industrial, commercial real estate, commercial real estate-construction and lease financing. Consumer loans consist of the following classes: residential mortgage loans, home equity loans and other consumer loans.

For all classes of loans, the accrual of interest is discontinued when the contractual payment of principal or interest has become 90 days or more past due or management has serious doubts about further collectability of principal or interest, even though the loan is currently performing. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. When a loan is placed on nonaccrual status, unpaid interest credited to income in the current year is reversed and unpaid interest accrued in prior years is charged against the allowance for loan and lease losses. Interest received on nonaccrual loans, including impaired loans, generally is either applied against principal or reported as interest income, according to management's judgment as to the collectability of principal. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments.

Commercial and industrial

Mid Penn originates commercial and industrial loans. Most of the Bank's commercial and industrial loans have been extended to finance local and regional businesses and include short-term loans to finance machinery and equipment purchases, inventory, and accounts receivable. Commercial loans also involve the extension of revolving credit for a combination of equipment acquisitions and working capital in expanding companies.

The maximum term for loans extended on machinery and equipment is based on the projected useful life of such machinery and equipment. Generally, the maximum term on non-mortgage lines of credit is one year. The loan-to-value ratio on such loans and lines of credit generally may not exceed 80% of the value of the collateral securing the loan. The Bank's commercial business lending policy includes credit file documentation and analysis of the borrower's character, capacity to repay the loan, the adequacy of the borrower's capital and collateral as well as an evaluation of conditions affecting the borrower. Analysis of the borrower's past, present, and future cash flows is also an important aspect of the Bank's current credit analysis. Nonetheless, such loans are believed to carry higher credit risk than more traditional investments.

Commercial and industrial loans typically are made on the basis of the borrower's ability to make repayment from the cash flow of the borrower's business. As a result, the availability of funds for the repayment of commercial business loans may be substantially dependent on the success of the business itself, which, in turn, is likely to be dependent upon the general economic environment. Mid Penn's commercial and industrial loans are usually, but not always, secured by business assets and personal guarantees. However, the collateral securing the loans may depreciate over time, may be difficult to appraise, and may fluctuate in value based on the success of the business.

Commercial real estate and commercial real estate - construction

Commercial real estate and commercial real estate construction loans generally present a higher level of risk than loans secured by one to four family residences. This greater risk is due to several factors, including the concentration of principal in a limited number of loans and borrowers, the effect of general economic conditions on income producing properties, and the increased difficulty of evaluating and monitoring these types of loans. In addition, the repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate project. If the cash flow from the project is reduced, the borrower's ability to repay the loan may be impaired.

Lease financing

Mid Penn originates leases for select commercial and state and municipal government lessees. The nature of the leased asset is often subject to rapid depreciation in salvage value over a relatively short time frame or may be of an industry specific nature, making appraisal or liquidation of the asset difficult. These factors have led the Bank to severely curtail the origination of new leases to state or municipal government agencies where default risk is extremely limited and to only the most credit-worthy commercial customers. These commercial customers are primarily leasing fleet vehicles for use in their primary line of business, mitigating some of the asset value concerns within the portfolio. Leasing has been a declining percentage of the Mid Penn's portfolio, currently representing 0.35% of outstanding loans.

Residential mortgage

Mid Penn offers a wide array of residential mortgage loans for both permanent structures and those under construction. The Bank's residential mortgage originations are secured primarily by properties located in its primary market and surrounding areas. Residential mortgage loans have terms up to a maximum of 30 years and with loan to value ratios up to 100% of the lesser of the appraised value of the security property or the contract price. Private mortgage insurance is generally required in an amount sufficient to reduce the Bank's exposure to at or below the 85% loan to value level. Residential mortgage loans generally do not include prepayment penalties.

In underwriting residential mortgage loans, the Bank evaluates both the borrower's ability to make monthly payments and the value of the property securing the loan. Most properties securing real estate loans made by Mid Penn are appraised by independent fee appraisers. The Bank generally requires borrowers to obtain an attorney's title opinion or title insurance and fire and property insurance (including flood insurance, if necessary) in an amount not less than the amount of the loan. Real estate loans originated by the Bank generally contain a "due on sale" clause allowing the Bank to declare the unpaid principal balance due and payable upon the sale of the security property.

The Bank underwrites residential mortgage loans to the standards established by the secondary mortgage market, i.e., Fannie Mae, Ginnie Mae, Freddie Mac, or Pennsylvania Housing Finance Agency standards, with the intention of selling the majority of residential mortgages originated into the secondary market. In the event that the facts and circumstances surrounding a residential mortgage application do not meet all underwriting conditions of the secondary mortgage market, the Bank will evaluate the failed conditions and evaluate the potential risk of holding the residential mortgage in the Bank's portfolio rather than rejecting the loan request. In the event that the loan is held in the Bank's portfolio, the interest rate on the residential mortgage would be increased to compensate for the added portfolio risk.

Consumer, including home equity

Mid Penn offers a variety of secured consumer loans, including home equity, automobile, and deposit secured loans. In addition, the Bank offers other secured and unsecured consumer loans. Most consumer loans are originated in Mid Penn's primary market and surrounding areas.

The largest component of Mid Penn's consumer loan portfolio consists of fixed rate home equity loans and variable rate home equity lines of credit. Substantially all home equity loans and lines of credit are secured by second mortgages on principal residences. The Bank will lend amounts, which, together with all prior liens, typically may be up to 85% of the appraised value of the property securing the loan. Home equity term loans may have maximum terms up to 20 years while home equity lines of credit generally have maximum terms of five years.

Consumer loan terms vary according to the type and value of collateral, length of contract and creditworthiness of the borrower. The underwriting standards employed by the Bank for consumer loans include an application, a determination of the applicant's payment history on other debts and an assessment of ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of the applicant is a primary consideration, the underwriting process also includes a comparison of the value of the collateral, if any, in relation to the proposed loan amount.

Consumer loans may entail greater credit risk than do residential mortgage loans, particularly in the case of consumer loans which are unsecured or are secured by rapidly depreciable assets, such as automobiles or recreational equipment. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance. In addition, consumer loan collections are dependent on the borrower's continuing financial stability, and thus are more likely to be affected by adverse personal circumstances. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

The allowance for credit losses consists of the allowance for loan and lease losses and the reserve for unfunded lending commitments. The allowance for loan and lease losses represents management's estimate of losses inherent in the loan portfolio as of the balance sheet date and is recorded as a reduction to loans. The reserve for unfunded lending commitments represents management's estimate of losses inherent in its unfunded loan commitments and is recorded in other liabilities on the consolidated balance sheet. The allowance for loan and lease losses is increased by the provision for loan and lease losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan and lease losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans are charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely.  Non-residential consumer loans are generally charged off no later than 120 days past due on a contractual basis, earlier in the event of Bankruptcy, or if there is an amount deemed uncollectible.  Because all identified losses are immediately charged off, no portion of the allowance for loan and lease losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance for credit losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a monthly evaluation of the adequacy of the allowance. The allowance is based on Mid Penn's past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The allowance consists of specific, general and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows, collateral value, or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, as well as smaller balance homogeneous loans, such as residential real estate, home equity and other consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative factors. These qualitative risk factors include changes in economic conditions, fluctuations in loan quality measures, changes in the experience of the lending staff and loan review systems, growth or changes in the mix of loans originated, and shifting industry or portfolio concentrations.

Each factor is assigned a value to reflect improving, stable or declining conditions based on management's best judgment using relevant information available at the time of the evaluation. Adjustments to the factors are supported through documentation of changes in conditions in a narrative accompanying the allowance for loan loss calculation.

Mid Penn considers a commercial loan (consisting of commercial and industrial, commercial real estate, commercial real estate-construction, and lease financing loan classes) to be impaired when it becomes 90 days or more past due and not in the process of collection. This methodology assumes the borrower cannot or will not continue to make additional payments. At that time the loan would be considered collateral dependent as the discounted cash flow ("DCF") method indicates no operating income is available for evaluating the collateral position; therefore, all impaired loans are deemed to be collateral dependent.

In addition, Mid Penn's rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn's impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

Mid Penn evaluates loans for charge-off on a monthly basis. Policies that govern the recommendation for charge-off are unique to the type of loan being considered. Commercial loans rated as nonaccrual or lower will first have a collateral evaluation completed in accordance with the guidance on impaired loans. Once the collateral evaluation has been completed, a specific allocation of allowance is made based upon the results of the evaluation. In the event the loan is unsecured, the loan would have been charged-off at the recognition of impairment. If the loan is secured, it will undergo a 90 day waiting period to ensure the collateral shortfall identified in the evaluation is accurate and then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). Commercial loans secured by real estate rated as impaired will also have an initial collateral evaluation completed in accordance with the guidance on impaired loans. An updated real estate valuation is ordered and the collateral evaluation is modified to reflect any variations in value. A specific allocation of allowance is made for any anticipated collateral shortfall and a 90 day waiting period begins to ensure the accuracy of the collateral shortfall. The loan is then charged down by the specific allocation. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). The process of charge-off for residential mortgage loans begins upon a loan becoming delinquent for 90 days and not in the process of collection. The existing appraisal is reviewed and a lien search is obtained to determine lien position and any instances of intervening liens. A new appraisal of the property will be ordered if deemed necessary by management and a collateral evaluation is completed. The loan will then be charged down to the value indicated in the evaluation. Consumer loans (including home equity loans and other consumer loans) are recommended for charge-off after reaching delinquency of 90 days and the loan is not in the process of collection. The entire balance of the consumer loan is recommended for charge-off at this point.

As noted above, Mid Penn assesses a specific allocation for commercial loans prior to reducing the carrying value or charging off the loan. Once the charge down is taken, the remaining balance remains a nonperforming loan with the original terms and interest rate intact (not restructured). In addition, Mid Penn takes a preemptive step when any commercial loan becomes classified under its internal classification system. A preliminary collateral evaluation in accordance with the guidance on impaired loans is prepared using the existing collateral information in the loan file. This process allows Mid Penn to review both the credit and documentation files to determine the status of the information needed to make a collateral evaluation. This collateral evaluation is preliminary but allows Mid Penn to determine if any potential collateral shortfalls exist.

It is Mid Penn's policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation. The credit department employs an electronic tracking system to monitor the receipt of and need for updated appraisals. To date, there have been no significant time lapses noted with the above processes.

In some instances Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment.  In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value.  The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management.  Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales.  Management reviews the estimates of these third parties and discounts them accordingly based on management's judgment, if deemed necessary.  

For impaired loans with no valuation allowance required, Mid Penn's practice of obtaining independent third party market valuations on the subject property within 30 days of being placed on non-accrual status sometimes indicates that the loan to value ratio is sufficient to obviate the need for a specific allocation in spite of significant deterioration in real estate values in Mid Penn's primary market area. These circumstances are determined on a case by case analysis of the impaired loans.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party.

Mid Penn does not currently, or plan in the future to, use automated valuation methodologies as a method of valuing real estate collateral.

An unallocated component is maintained to cover uncertainties that could affect management's estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, Mid Penn does not separately identify individual residential mortgage loans, home equity loans and other consumer loans for impairment disclosures, unless such loans are the subject of a troubled debt restructuring agreement.

Loans whose terms are modified are classified as troubled debt restructurings if the borrowers have been granted concessions and it is deemed that those borrowers are experiencing financial difficulty. Concessions granted under a troubled debt restructuring generally involve interest rates being granted below current market rates for the credit risk of the loan or an extension of a loan's stated maturity date. Non-accrual troubled debt restructurings are restored to accrual status if principal and interest payments, under the modified terms, are current for six consecutive months after modification.   Loans classified as troubled debt restructurings are designated as impaired.

The allowance calculation methodology includes further segregation of loan classes into risk rating categories. The borrower's overall financial condition, repayment sources, guarantors, and value of collateral, if appropriate, are evaluated annually for commercial loans or when credit deficiencies arise, such as delinquent loan payments. Credit quality risk ratings include regulatory classifications of special mention, substandard, doubtful, and loss.  Loans criticized as special mention have potential weaknesses that deserve management's close attention.  If uncorrected, the potential weaknesses may result in deterioration of the repayment prospects.  Loans classified substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They include loans that are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans classified doubtful have all the weaknesses inherent in loans classified substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable.   Loans classified as a loss are considered uncollectible and are charged to the allowance for loan losses. Any loans not classified as noted above are rated pass.

In addition, Federal regulatory agencies, as an integral part of their examination process, periodically review the Bank's allowance for loan and lease losses and may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination, which may not be currently available to management. Based on management's comprehensive analysis of the loan portfolio, management believes the current level of the allowance for loan losses is adequate.

The classes of the loan portfolio, summarized by the aggregate pass rating and the classified ratings of special mention, substandard, and doubtful within Mid Penn's internal risk rating system as of June 30, 2012 and December 31, 2011 are as follows:            

(Dollars in thousands)                           June 30, 2012	Pass	Special Mention	Substandard	Doubtful	Total
Commercial and industrial	$    70,308	$    2,903	$       3,910	$             -	$    77,121
Commercial real estate	266,007	9,166	14,020	-	289,193
Commercial real estate - construction	32,470	427	-	-	32,897
Lease financing	1,624	-	-	-	1,624
Residential mortgage	52,690	-	-	-	52,690
Home equity	23,898	204	430	-	24,532
Consumer	7,042	298	585	-	7,925
	$ 454,039	$  12,998	$    18,945	$             -	$  485,982

(Dollars in thousands)                   December 31, 2011	Pass	Special Mention	Substandard	Doubtful	Total
Commercial and industrial	$    68,775	$    3,528	$       4,627	$             -	$    76,930
Commercial real estate	271,551	6,530	14,815	-	292,896
Commercial real estate - construction	29,706	445	584	-	30,735
Lease financing	1,724	-	-	-	1,724
Residential mortgage	48,270	-	-	-	48,270
Home equity	23,248	218	683	-	24,149
Consumer	7,705	308	-	-	8,013
	$  450,979	$  11,029	$     20,709	$             -	$  482,717

Impaired loans by loan portfolio class as of June 30, 2012 and December 31, 2011 are summarized as follows:

(Dollars in thousands)	June 30, 2012			December 31, 2011
	Recorded Investment	Unpaid Principal Balance	Related Allowance	Recorded Investment	Unpaid Principal Balance	Related Allowance
With no related allowance recorded:
Commercial and industrial	$        233	$     1,234	$             -	$        463	$     1,382	$             -
Commercial real estate	7,465	11,100	-	4,473	6,543	-
Commercial real estate - construction	-	-	-	584	592	-
Home equity	34	42	-	251	386	-
With an allowance recorded:
Commercial and industrial	$        636	$        773	$        348	$        656	$        792	$        451
Commercial real estate	1,819	1,944	1,189	4,425	6,163	1,380
Home equity	72	75	13	74	77	15
Consumer	585	585	450	-	-	-
Total:
Commercial and industrial	$        869	$     2,007	$        348	$     1,119	$     2,174	$        451
Commercial real estate	9,284	13,044	1,189	8,898	12,706	1,380
Commercial real estate - construction	-	-	-	584	592	-
Home equity	106	117	13	325	463	15
Consumer	585	585	450	-	-	-

Average recorded investment of impaired loans and related interest income recognized for the three and six months ended June 30, 2012 and June 30, 2011 are summarized as follows:

	Three Months Ended
(Dollars in thousands)	June 30, 2012		June 30, 2011
	Average Recorded Investment	Interest Income Recognized	Average Recorded Investment	Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$             468	$                  -	$             972	$               84
Commercial real estate	7,894	-	4,583	264
Commercial real estate - construction	-	-	844	18
Lease financing		-	150	-
Residential mortgage	-	-	69	11
Home equity	34	4	265	-
With an allowance recorded:
Commercial and industrial	$             656	$                  -	$             459	$                  -
Commercial real estate	1,865	-	3,593	-
Home equity	73	-	20	-
Consumer	585	-	-	-
Total:
Commercial and industrial	$          1,124	$                  -	$          1,431	$               84
Commercial real estate	9,759	-	8,176	264
Commercial real estate - construction	-	-	844	18
Lease financing	-	-	150	-
Residential mortgage	-	-	69	11
Home equity	107	4	285	-
Consumer	585	-	-	-

	Six Months Ended
	June 30, 2012		June 30, 2011
(Dollars in thousands)	Average Recorded Investment	Interest Income Recognized	Average Recorded Investment	Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$             473	$                  -	$          1,033	$               84
Commercial real estate	7,942	-	6,003	265
Commercial real estate - construction	-	-	1,249	18
Lease financing	-	-	162	-
Residential mortgage	-	-	71	12
Home equity	35	4	271	-
With an allowance recorded:
bCommercial and industrial	$             657	$                  -	$             476	$                  -
Commercial real estate	1,876	-	3,748	-
Home equity	73	-	24	-
Consumer	585	-	-	-
Total:
Commercial and industrial	$          1,130	$                  -	$          1,509	$               84
Commercial real estate	9,818	-	9,751	265
Commercial real estate - construction	-	-	1,249	18
Lease financing	-	-	162	-
Residential mortgage	-	-	71	12
Home equity	108	4	295	-
Consumer	585	-	-	-

Non-accrual loans by loan portfolio class as of June 30, 2012 and December 31, 2011 are summarized as follows:

(Dollars in thousands)	June 30, 2012	December 31, 2011
Commercial and industrial	$                  509	$                 1,117
Commercial real estate	9,648	8,899
Commercial real estate - construction	-	584
Residential mortgage	751	703
Home equity	369	496
Consumer	585	1
	$             11,862	$                  11,800

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The classes of the loan portfolio summarized by the past due status as of June 30, 2012 and December 31, 2011 are summarized as follows:

(Dollars in thousands)        June 30, 2012	30-59 Days Past Due	60-89 Days Past Due	Greater than 90 Days	Total Past Due	Current	Total Loans	Loans Receivable > 90 Days and Accruing
Commercial and industrial	$           -	$        22	$      470	$      492	$  76,629	$ 77,121	$             -
Commercial real estate	1,697	409	7,655	9,761	279,432	289,193	-
Commercial real estate - construction	54	-	-	54	32,843	32,897	-
Lease financing	-	-	-	-	1,624	1,624	-
Residential mortgage	53	-	751	804	51,886	52,690	-
Home equity	-	-	368	368	24,164	24,532	-
Consumer	3	9	585	597	7,328	7,925	-
Total	$   1,807	$      440	$   9,829	$ 12,076	$473,906	$ 485,982	$            -

(Dollars in thousands)  December 31, 2011	30-59 Days Past Due	60-89 Days Past Due	Greater than 90 Days	Total Past Due	Current	Total Loans	Loans Receivable > 90 Days and Accruing
Commercial and industrial	$      141	$      663	$   1,052	$   1,856	$  75,074	$   76,930	$             -
Commercial real estate	1,037	909	6,204	8,150	284,746	292,896	-
Commercial real estate - construction	6	-	584	590	30,145	30,735	-
Lease financing	-	-	-	-	1,724	1,724	-
Residential mortgage	410	11	691	1,112	47,158	48,270	-
Home equity	111	-	428	539	23,610	24,149	-
Consumer	15	3	1	19	7,994	8,013	-
Total	$   1,720	$   1,586	$   8,960	$ 12,266	$470,451	$ 482,717	$             -

The following tables summarize the allowance for loan and lease losses and recorded investments in loans receivable:

(Dollars in thousands)
As of, and for the period ended, June 30, 2012	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Allowance for loan and lease losses:
Beginning balance, April 1, 2012	$       1,755	$       3,362	$            27	$          2	$         454	$  323	$          524	$          130	$ 6,577
Charge-offs	(12)	(149)	(5)	-	(59)	-	(5)	-	(230)
Recoveries	4	2	-	-	-	1	6	-	13
Provisions	(164)	225	5	-	80	17	5	57	225
Ending balance,         June 30, 2012	$       1,583	$       3,440	$            27	$          2	$         475	$  341	$          530	$          187	$ 6,585
	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Beginning balance,        January 1, 2012	$       2,274	$       3,544	$            23	$          2	$         362	$  337	$             87	$          143	$ 6,772
Charge-offs	(216)	(455)	(5)	-	(69)	-	(7)	-	(752)
Recoveries	8	5	2	-	-	9	16	-	40
Provisions	(483)	346	7	-	182	(5)	434	44	525
Ending balance,         June 30, 2012	$       1,583	$       3,440	$            27	$          2	$         475	$  341	$          530	$          187	$ 6,585
Ending balance: individually evaluated for impairment	$          348	$       1,189	$               -	$          -	$             -	$    13	$          450	$               -	$ 2,000
Ending balance: collectively evaluted for impairment	$       1,235	$       2,251	$            27	$          2	$         475	$  328	$             80	$          187	$ 4,585
Loans receivable:
Ending balance	$     77,121	$   289,193	$     32,897	$   1,624	$    52,690	$24,532	$       7,925	$               -	$ 485,982
Ending balance: individually evaluted  for impairment	$          869	$       9,284	$               -	$          -	$             -	$    106	$          585	$               -	$     10,844
Ending balance: collectively evaluated for impairment	$     76,252	$   279,909	$     32,897	$   1,624	$   52,690	$24,426	$       7,340	$               -	$   475,138

(Dollars in thousands)
As of, and for the period ended, June 30, 2011	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Allowance for loan and lease losses:
Beginning balance,        April 1, 2011	$       2,442	$       3,833	$           181	$            1	$         310	$  320	$             49	$              36	$   7,172
Charge-offs	(535)	(176)	-	-	(45)	(40)	(35)	-	(831)
Recoveries	4	8	-	-	-	-	10	-	22
Provisions	675	(1)	(129)	-	69	32	25	(121)	550
Ending balance,         June 30, 2011	$       2,586	$       3,664	$             52	$            1	$         334	$  312	$             49	$           (85)	$   6,913
	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Beginning balance, January 1, 2011	$       2,447	$       3,616	$           159	$            1	$         219	$  363	$              61	$            195	$   7,061
Charge-offs	(535)	(216)	-	-	(77)	(40)	(86)	-	(954)
Recoveries	13	17	-	5	1	3	17	-	56
Provisions	661	247	(107)	(5)	191	(14)	57	(280)	750
Ending balance,         June 30, 2011	$       2,586	$       3,664	$             52	$            1	$         334	$  312	$             49	$           (85)	$   6,913
Ending balance: individually evaluated for impairment	$          371	$          902	$               -	$             -	$              -	$    19	$              -	$                -	$   1,292
Ending balance: collectively evaluted for impairment	$       2,215	$       2,762	$             52	$            1	$         334	$  293	$             49	$           (85)	$   5,621
Loans receivable:
Ending balance	$     82,420	$   295,527	$      23,449	$     2,206	$    46,067	$22,266	$       7,647	$                -	$479,582
Ending balance: individually evaluted  for impairment	$       1,119	$       8,049	$           762	$        130	$           68	$    273	$              -	$                -	$ 10,401
Ending balance: collectively evaluated for impairment	$     81,301	$   287,478	$      22,687	$     2,076	$    45,999	$21,993	$       7,647	$                -	$469,181

(Dollars in thousands) December 31, 2011	Commercial and industrial	Commercial real estate	Commercial real estate - construction	Lease financing	Residential mortgage	Home equity	Consumer	Unallocated	Total
Allowance for loan and lease losses:
Ending balance	$       2,274	$       3,544	$             23	$          2	$          362	$     337	$             87	$          143	$   6,772
Ending balance: individually evaluated for impairment	$          451	$       1,380	$               -	$          -	$               -	$       15	$              -	$               -	$   1,846
Ending balance: collectively evaluted for impairment	$       1,823	$       2,164	$             23	$          2	$          362	$     322	$             87	$          143	$   4,926
Loans receivable:
Ending balance	$     76,930	$   292,896	$      30,735	$   1,724	$     48,270	$24,149	$        8,013	$               -	$482,717
Ending balance: individually evaluted  for impairment	$       1,119	$       8,898	$           584	$          -	$               -	$     325	$              -	$               -	$ 10,926
Ending balance: collectively evaluated for impairment	$     75,811	$   283,998	$      30,151	$   1,724	$     48,270	$23,824	$        8,013	$               -	$471,791

The recorded investments in troubled debt restructured loans at June 30, 2012 and December 31, 2011 are as follows:

(Dollars in thousands)                       June 30, 2012	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment	Recorded Investment
Commercial and industrial	$                      40	$                     35	$                     31
Commercial real estate	951	4,314	3,497
Residential mortgage	558	552	457
	$                 8,549	$                4,901	$                3,985

(Dollars in thousands)                December 31, 2011	Pre-Modification Outstanding Recorded Investment	Post-Modification Outstanding Recorded Investment	Recorded Investment
Commercial and industrial	$                      40	$                     35	$                     32
Commercial real estate	8,315	4,568	3,955
Residential mortgage	698	691	599
Home equity	29	28	16
	$                 9,082	$                5,322	$                4,602

Mid Penn's troubled debt restructured loans at June 30, 2012 totaled $3,985,000, of which eight loans to unrelated borrowers, totaling $457,000, are accruing residential mortgages in compliance with the terms of the modification.  The remaining 11 loans totaling $3,528,000 are nonaccrual impaired loans, and resulted in a collateral evaluation in accordance with the guidance on impaired loans.  Of these 11 loans, one business relationship accounted for five loans totaling $647,000, another business relationship consisting of two loans totaled $463,000, a large commercial participation totaling $1,768,000 accounted for three loans, and the remaining unrelated loan totaled $650,000.   At December 31, 2011, troubled debt restructured loans totaled $4,602,000, of which 10 were accruing residential mortgage loans in compliance with the terms of the modification.  These loans were to unrelated borrowers and totaled $599,000.  The remaining 14 loans, totaling $4,003,000, were nonaccrual impaired loans, and resulted in a collateral evaluation in accordance with the guidance on impaired loans.  Of these 14 loans, one business relationship accounted for five loans totaling $664,000, another business relationship totaling $744,000 accounted for four loans, a large commercial participation totaling $1,929,000 accounted for three loans, and the remaining two loans were to unrelated borrowers and totaled $666,000.  As a result of the evaluations at June 30, 2012 and December 31, 2011, a specific allocation and, subsequently, charge offs have been taken as appropriate.  As of June 30, 2012 and December 31, 2011, charge offs associated with troubled debt restructured loans while under a forbearance agreement totaled $0 and there were no defaulted troubled debt restructured loans as all troubled debt restructured loans were current with respect to their associated forbearance agreements.  Four of the current forbearance agreements were negotiated during 2009, while the remaining 15 were negotiated during 2010.

Mid Penn entered into forbearance agreements on all loans currently classified as troubled debt restructures and all of these agreements have resulted in additional principal repayment. The terms of these forbearance agreements vary whereby principal payments have been decreased, interest rates have been reduced and/or the loan will be repaid as collateral is sold.

As a result of adopting the amendments in ASU No. 2011-02, Mid Penn reassessed all restructurings that occurred on or after January 1, 2011 for identification as troubled debt restructurings. Mid Penn identified no loans for which the allowance for loan losses had previously been measured under a general allowance for credit losses methodology that are now considered troubled debt restructurings in accordance with ASU No. 2011-02.

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Fair Value Measurements (Policy)

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurement, Policy [Policy Text Block]

Impaired Loans:

Mid Penn's rating system assumes any loans classified as sub-standard non-accrual to be impaired, and all of these loans are considered collateral dependent; therefore, all of Mid Penn's impaired loans, whether reporting a specific allocation or not, are considered collateral dependent.

It is Mid Penn's policy to obtain updated third party valuations on all impaired loans collateralized by real estate within 30 days of the credit being classified as sub-standard non-accrual. Prior to receipt of the updated real estate valuation Mid Penn will use any existing real estate valuation to determine any potential allowance issues; however no allowance recommendation will be made until which time Mid Penn is in receipt of the updated valuation.

In some instances Mid Penn is not holding real estate as collateral and is relying on business assets (personal property) for repayment.  In these circumstances a collateral inspection is performed by Mid Penn personnel to determine an estimated value.  The value is based on net book value, as provided by the financial statements, and discounted accordingly based on determinations made by management.  Occasionally, Mid Penn will employ an outside service to provide a fair estimate of value based on auction sales or private sales.  Management reviews the estimates of these third parties and discounts them accordingly based on management's judgment, if deemed necessary.   Mid Penn considers the estimates used in its impairment analysis to be Level 3 inputs.

Mid Penn actively monitors the values of collateral on impaired loans. This monitoring may require the modification of collateral values over time or changing circumstances by some factor, either positive or negative, from the original values. All collateral values will be assessed by management at least every 18 months for possible revaluation by an independent third party. Mid Penn does not currently, or plan to in the future, use automated valuation methodologies as a method of valuing real estate collateral.

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Earnings Per Common Share

6 Months Ended

Jun. 30, 2012

Earnings per Common Share [Abstract]

Earnings per Common Share

11. Earnings per Common Share

Earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each of the periods presented giving retroactive effect to stock dividends and stock splits. The following data show the amounts used in computing basic and diluted earnings per common share. As shown in the table that follows, diluted earnings per common share is computed using weighted average common shares outstanding, plus weighted average common shares available from the exercise of all dilutive stock warrants issued to the U.S. Treasury under the provisions of the Capital Purchase Program, based on the average share price of Mid Penn's common stock during the period.

The computations of basic earnings per common share follow:
(Dollars in thousands, except per share data)	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
Net Income	$           1,360	$           1,059	$        2,494	$        2,059
Less:  Dividends on preferred stock	(125)	(125)	(250)	(250)
Accretion of preferred stock discount	(4)	(4)	(7)	(7)
Net income available to common shareholders	$           1,231	$              930	$        2,237	$        1,802
Weighted average common shares outstanding	3,485,867	3,480,750	3,485,203	3,480,282
Basic earnings per common share	$             0.35	$             0.27	$          0.64	$          0.52

The computations of diluted earnings per common share follow:
(Dollars in thousands, except per share data)	Three Months Ended June 30,		Six Months Ended June 30,
	2012	2011	2012	2011
Net income available to common shareholders	$           1,231	$              930	$        2,237	$        1,802
Weighted average number of common shares outstanding	3,485,867	3,480,750	3,485,203	3,480,282
Dilutive effect of potential common stock arising from stock warrants:
Exercise of outstanding stock warrants issued to U.S. Treasury
under the Capital Repurchase Program	-	-	-	-
Adjusted weighted-average common shares outstanding	3,485,867	3,480,750	3,485,203	3,480,282
Diluted earnings per common share	$             0.35	$             0.27	$          0.64	$          0.52

As of June 30, 2012, Mid Penn had 73,099 warrants that were anti-dilutive because the fair value of the common stock was below the $20.52 exercise price of these warrants.

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Long-term Debt

6 Months Ended

Jun. 30, 2012

Long-term Debt [Abstract]

Long-term Debt

7. Long-term Debt

During the three and six months ended June 30, 2012, the Bank entered into no additional long-term borrowings with the Federal Home Loan Bank of Pittsburgh. During the same time periods, no long-term borrowings with the Federal Home Loan Bank of Pittsburgh matured.

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Guarantees

6 Months Ended

Jun. 30, 2012

Guarantees [Abstract]

Guarantees

5. Guarantees

In the normal course of business, Mid Penn makes various commitments and incurs certain contingent liabilities, which are not reflected in the accompanying consolidated financial statements. The commitments include various guarantees and commitments to extend credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Mid Penn evaluates each customer's credit-worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management's credit evaluation of the customer. Standby letters of credit and financial guarantees written are conditional commitments to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Mid Penn had $9,601,000 and $7,320,000 of standby letters of credit outstanding as of June 30, 2012 and December 31, 2011, respectively. Mid Penn does not anticipate any losses because of these transactions. The current amount of the liability as of June 30, 2012 for payment under standby letters of credit issued was not material.

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Short-term Borrowings

6 Months Ended

Jun. 30, 2012

Short-term Borrowings [Abstract]

Short-term Borrowings

6. Short-term Borrowings

Short-term borrowings as of June 30, 2012 consisted of federal funds purchased. There were no short-term borrowings at December 31, 2011. Federal funds purchased are the short-term borrowings needed to manage the Banks overnight liquidity needs.

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Defined Benefit Plans

6 Months Ended

Jun. 30, 2012

Defined Benefit Plans [Abstract]

Defined Benefit Plans

8. Defined Benefit Plans

Mid Penn has an unfunded noncontributory defined benefit retirement plan for directors. The plan provides defined benefits based on years of service. In addition, Mid Penn sponsors a defined benefit health care plan that provides post-retirement medical benefits and life insurance to qualifying full-time employees. These health care and life insurance plans are noncontributory. A December 31 measurement date for our plans is used.

The components of net periodic benefit costs from these benefit plans are as follows:

	Three Months Ended June 30,
(Dollars in thousands)	Pension Benefits		Other Benefits
	2012	2011	2012	2011
Service cost	$                   5	$                   6	$                   5	$                   5
Interest cost	11	13	9	11
Amortization of prior service cost	6	5	1	-
Net periodic benefit cost	$                 22	$                 24	$                 15	$                 16
	Six Months Ended June 30,
(Dollars in thousands)	Pension Benefits		Other Benefits
	2012	2011	2012	2011
Service cost	$                 11	$                 12	$                 10	$                 10
Interest cost	23	26	18	22
Amortization of prior service cost	11	10	1	-
Net periodic benefit cost	$                 45	$                 48	$                 29	$                 32

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Loans and Allowance for Loan and Lease Losses (Classes Of The Loan Portfolio Summarized By The Aggregate Risk Rating) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 485,982	$ 482,717	$ 479,582
Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	77,121	76,930	82,420
Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	289,193	292,896	295,527
Commercial real estate - construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	32,897	30,735	23,449
Lease financing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,624	1,724	2,206
Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	52,690	48,270	46,067
Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	24,532	24,149	22,266
Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,925	8,013	7,647
Pass [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	454,039	450,979
Pass [Member] | Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	70,308	68,775
Pass [Member] | Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	266,007	271,551
Pass [Member] | Commercial real estate - construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	32,470	29,706
Pass [Member] | Lease financing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,624	1,724
Pass [Member] | Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	52,690	48,270
Pass [Member] | Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	23,898	23,248
Pass [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,042	7,705
Special Mention [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	12,998	11,029
Special Mention [Member] | Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,903	3,528
Special Mention [Member] | Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	9,166	6,530
Special Mention [Member] | Commercial real estate - construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	427	445
Special Mention [Member] | Lease financing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Special Mention [Member] | Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Special Mention [Member] | Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	204	218
Special Mention [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	298	308
Substandard [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	18,945	20,709
Substandard [Member] | Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,910	4,627
Substandard [Member] | Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	14,020	14,815
Substandard [Member] | Commercial real estate - construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount		584
Substandard [Member] | Lease financing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Substandard [Member] | Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Substandard [Member] | Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	430	683
Substandard [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	585
Doubtful [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Commercial and industrial [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Commercial real estate [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Commercial real estate - construction [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Lease financing [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Residential mortgage [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Home equity [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount
Doubtful [Member] | Consumer [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount

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Investment Securities (Policy)

6 Months Ended

Jun. 30, 2012

Investment Securities [Abstract]

Investment Securities [Policy Text Block]

Realized gains and losses on dispositions are based on the net proceeds and the adjusted book value of the securities sold, using the specific identification method. Unrealized gains and losses on investment securities available for sale are based on the difference between book value and fair value of each security. These gains and losses are credited or charged to other comprehensive income, whereas realized gains and losses flow through Mid Penn's results of operations.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Measurements [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

(Dollars in thousands)		Fair value measurements at June 30, 2012 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	June 30, 2012	(Level 1)	(Level 2)	(Level 3)
U.S. Treasury and U.S. government agencies	$                25,598	$                -	$        25,598	$                -
Mortgage-backed U.S. government agencies	70,348	-	70,348	-
State and political subdivision obligations	51,769	-	51,769	-
Equity securities	392	392	-	-
	$              148,107	$             392	$      147,715	$                -
(Dollars in thousands)		Fair value measurements at December 31, 2011 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	December 31, 2011	(Level 1)	(Level 2)	(Level 3)
U.S. Treasury and U.S. government agencies	$                27,617	$                -	$        27,617	$                -
Mortgage-backed U.S. government agencies	82,668	-	82,668	-
State and political subdivision obligations	48,366	-	48,366	-
Equity securities	392	392	-	-
	$              159,043	$             392	$      158,651	$                -

Fair Value Measurements, Nonrecurring [Table Text Block]

(Dollars in thousands)		Fair value measurements at June 30, 2012 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	June 30, 2012	(Level 1)	(Level 2)	(Level 3)
U.S. Treasury and U.S. government agencies	$                25,598	$                -	$        25,598	$                -
Mortgage-backed U.S. government agencies	70,348	-	70,348	-
State and political subdivision obligations	51,769	-	51,769	-
Equity securities	392	392	-	-
	$              148,107	$             392	$      147,715	$                -
(Dollars in thousands)		Fair value measurements at December 31, 2011 using:
	Total carrying value at	Quoted prices in active markets	Significant other observable inputs	Significant unobservable inputs
Assets:	December 31, 2011	(Level 1)	(Level 2)	(Level 3)
U.S. Treasury and U.S. government agencies	$                27,617	$                -	$        27,617	$                -
Mortgage-backed U.S. government agencies	82,668	-	82,668	-
State and political subdivision obligations	48,366	-	48,366	-
Equity securities	392	392	-	-
	$              159,043	$             392	$      158,651	$                -

Fair Value, by Balance Sheet Grouping [Table Text Block]

(Dollars in thousands)		June 30, 2012		December 31, 2011
		Carrying	Fair	Carrying	Fair
		Value	Value	Value	Value
Financial assets:
	Cash and cash equivalents	$        10,216	$        10,216	$        17,841	$        17,841
	Interest-bearing balances with other financial institutions	24,848	24,848	27,477	27,477
	Investment securities	148,107	148,107	159,043	159,043
	Net loans and leases	479,397		475,945	498,029
	Restricted investment in bank stocks	2,817	2,817	3,120	3,120
	Accrued interest receivable	2,980	2,980	3,067	3,067
	Mortgage servicing rights	199	160	173	123
Financial liabilities:
	Deposits	$      610,414		$      634,055	$      644,474
	Short-term borrowings	3,445		-	-
	Long-term debt	22,606		22,701	24,609
	Accrued interest payable	1,102	1,102	1,064	1,064
Off-balance sheet financial instruments:
	Commitments to extend credit	$                -	$                -	$                -	$                -
	Financial standby letters of credit	-	-	-	-

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

			Fair Value Measurements
			Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)	Significant Other Observable Inputs        (Level 2)	Significant Unobservable Inputs        (Level 3)
(Dollars in thousands)	Carrying Amount	Fair Value
June 30, 2012
Financial instruments - assets
Net loans and leases	479,397		$                  -	$                  -
Mortgage servicing rights	199	160	-	160	-
Financial instruments - liabilities
Deposits	$     610,414		-		-
Short-term borrowings	3,445		-		-
Long-term debt	22,606		-		-

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Preferred Stock (Narrative) (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011	Dec. 19, 2008
Class of Stock [Line Items]
Preferred Stock, Shares Issued	10,000,000	10,000,000
Preferred Stock, Liquidation Preference, Value			$ 1,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights	73,099		73,099
Class of Warrant or Right, Exercise Price of Warrants or Rights	20.52		20.52
Capital			10,000,000
Warrant Expiration			10
T. A. R. P. Executive Compensation Cap			$ 500,000
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred Stock, Shares Issued			10,000
Cumulative Dividend Rate			The Series A Preferred Stock pays cumulative dividends at a rate of 5% per annum for the first five years and 9% per annum thereafter.

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Fair Value Measurements (Fair Value, Assets Measured on Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	$ 148,107	$ 159,043
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	392	392
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	147,715	158,651
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
U.S. Treasury and U.S. government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	25,598	27,617
U.S. Treasury and U.S. government agencies [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
U.S. Treasury and U.S. government agencies [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	25,598	27,617
U.S. Treasury and U.S. government agencies [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
Mortgage-backed U.S. government agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	70,348	82,668
Mortgage-backed U.S. government agencies [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
Mortgage-backed U.S. government agencies [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	70,348	82,668
Mortgage-backed U.S. government agencies [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
State and political subdivision obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	51,769	48,366
State and political subdivision obligations [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
State and political subdivision obligations [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	51,769	48,366
State and political subdivision obligations [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
Equity securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	392	392
Equity securities [Member] | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	392	392
Equity securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities
Equity securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statements of Comprehensive Income [Abstract]
Net income	$ 1,360	$ 1,059	$ 2,494	$ 2,059
Other comprehensive income:
Unrealized gains arising during the period on available for sale securities, net of income taxes	289	1,205	381	1,402
Reclassification adjustment for net gain on sales of available for sale securities realized in net income, net of income	(6)		(17)
Change in defined benefit plans, net of income taxes	20	3	(2)	4
Total other comprehensive income	303	1,208	362	1,406
Total comprehensive income	$ 1,663	$ 2,267	$ 2,856	$ 3,465

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Investment Securities

6 Months Ended

Jun. 30, 2012

Investment Securities [Abstract]

Investment Securities

2. Investment Securities

Securities to be held for indefinite periods, but not intended to be held to maturity, are classified as available for sale and carried at fair value. Securities held for indefinite periods include securities that management intends to use as part of its asset and liability management strategy and that may be sold in response to liquidity needs, changes in interest rates, resultant prepayment risk, and other factors related to interest rate and resultant prepayment risk changes.

Realized gains and losses on dispositions are based on the net proceeds and the adjusted book value of the securities sold, using the specific identification method. Unrealized gains and losses on investment securities available for sale are based on the difference between book value and fair value of each security. These gains and losses are credited or charged to other comprehensive income, whereas realized gains and losses flow through Mid Penn's results of operations.

Accounting Standards Codification ("ASC") Topic 320, Investments – Debt and Equity Securities, clarifies the interaction of the factors that should be considered when determining whether a debt security is other-than-temporarily impaired. For debt securities, management must assess whether (a) it has the intent to sell the security and (b) it is more likely than not that it will be required to sell the security prior to its anticipated recovery. These steps are done before assessing whether the entity will recover the cost basis of the investment. Previously, this assessment required management to assert it has both the intent and the ability to hold a security for a period of time sufficient to allow for an anticipated recovery in fair value to avoid recognizing other-than-temporary impairment. This change does not affect the need to forecast recovery of the value of the security through either cash flows or market price.

In instances when a determination is made that other-than-temporary impairment exists but the investor does not intend to sell the debt security and it is not more likely than not that it will be required to sell the debt security prior to its anticipated recovery, this guidance changes the presentation and amount of the other-than-temporary impairment recognized in the income statement. The other-than-temporary impairment is separated into (a) the amount of the total other-than-temporary impairment related to a decrease in cash flows expected to be collected from the debt security (the credit loss) and (b) the amount of the total other-than-temporary impairment related to all other factors. The amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings. The amount of the total other-than-temporary impairment related to all other factors is recognized in other comprehensive income.

At June 30, 2012 and December 31, 2011, amortized cost, fair value, and unrealized gains and losses on investment securities are as follows:

(Dollars in thousands)
		Amortized	Unrealized	Unrealized	Fair
		Cost	Gains	Losses	Value
June 30, 2012
Available-for-sale securities:
	U.S. Treasury and U.S. government agencies	$        24,051	$        1,547	$                -	$        25,598
	Mortgage-backed U.S. government agencies	70,232	526	410	70,348
	State and political subdivision obligations	49,751	2,130	112	51,769
	Equity securities	400	-	8	392
		$       144,434	$        4,203	$           530	$      148,107
(Dollars in thousands)
		Amortized	Unrealized	Unrealized	Fair
		Cost	Gains	Losses	Value
December 31, 2011
Available for sale securities:
	U.S. Treasury and U.S. government agencies	$        26,116	$        1,501	$                -	$        27,617
	Mortgage-backed U.S. government agencies	82,777	491	600	82,668
	State and political subdivision obligations	46,654	1,836	124	48,366
	Equity securities	400	-	8	392
		$       155,947	$         3,828	$           732	$      159,043

Estimated fair values of debt securities are based on quoted market prices, where applicable. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments, adjusted for differences between the quoted instruments and the instruments being valued.

Mid Penn's sole equity security is an investment in Access Capital Strategies, an equity fund that invests in low to moderate income financing projects. This investment was purchased in 2004 and additional shares were purchased in 2011 to help fulfill the Bank's regulatory requirement of the Community Reinvestment Act and at June 30, 2012 and December 31, 2011, is reported at fair value.

Investment securities having a fair value of $45,155,000 at June 30, 2012, and $85,591,000 at December 31, 2011, were pledged to secure public deposits and other borrowings.

Mid Penn realized gross gains of $10,000 and $26,000 on sales of securities available for sale during the three and six months ended June 30, 2012.  During the same time periods, Mid Penn realized $0 gross losses on sales of securities available for sale.   Mid Penn did not realize any gross gains or losses on the sales of securities available for sale during the three or six months ended June 30, 2011.

The following table presents gross unrealized losses and fair value of investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2012 and December 31, 2011.

(Dollars in thousands)		Less Than 12 Months		12 Months or More		Total
June 30, 2012		Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
		Value	Losses	Value	Losses	Value	Losses
Available-for-sale securities:
	Mortgage-backed U.S. government agencies	$38,347	$        355	$  3,715	$        55	$42,062	$        410
	State and political subdivision obligations	4,635	58	1,198	54	5,833	112
	Equity securities			392	8	392	8
	Total temporarily impaired
	available for sale securities	$42,982	$        413	$  5,305	$      117	$48,287	$        530
(Dollars in thousands)		Less Than 12 Months		12 Months or More		Total
December 31, 2011		Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
		Value	Losses	Value	Losses	Value	Losses
Available-for-sale securities:
	Mortgage-backed U.S. government agencies	$46,497	$        593	$    370	$          7	$46,867	$        600
	State and political subdivision obligations	4,371	49	1,169	75	5,540	124
	Equity securities	-	-	392	8	392	8
	Total temporarily impaired
	available for sale securities	$50,868	$        642	$  1,931	$        90	$52,799	$        732

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis; and more frequently when economic or market concerns warrant such evaluation. Consideration is given to the length of time and the extent to which the fair value has been less than cost, and the financial condition and near term prospects of the issuer. In addition, for debt securities, Mid Penn considers (a) whether management has the intent to sell the security, (b) it is more likely than not that management will be required to sell the security prior to its anticipated recovery, and (c) whether management expects to recover the entire amortized cost basis. For equity securities, management considers the intent and ability to hold securities until recovery of unrealized losses.

At June 30, 2012, Mid Penn had 50 debt securities from separate issuers with unrealized losses. These securities have depreciated 1.09% from their amortized cost basis. At December 31, 2011, 45 debt securities with unrealized losses had depreciated 1.37% from the amortized cost basis. These securities are issued by either the U.S. Government or other governmental agencies. These unrealized losses were determined principally by reference to current interest rates for similar types of securities. In analyzing an issuer's financial condition, management considers whether the U.S. Government or its agencies issued the securities, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer's financial condition. Based on the above conditions management has determined that no declines are deemed to be other-than-temporary.

The table below is the maturity distribution of investment securities at amortized cost and fair value:

(Dollars in thousands)	June 30, 2012
	Amortized	Fair
	Cost	Value
Due in 1 year or less	$         325	$         334
Due after 1 year but within 5 years	25,965	27,422
Due after 5 years but within 10 years	17,966	19,118
Due after 10 years	29,546	30,493
	73,802	77,367
Mortgage-backed securities	70,232	70,348
Equity securities	400	392
	$  144,434	$  148,107

Mortgage-backed securities at June 30, 2012 had an average life of 1.6 years.  Prepayment speed assumptions in this category have accelerated since December 31, 2011.

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Defined Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2012

Other Benefit Plans [Abstract]

Schedule of Net Periodic Benefit Costs [Table Text Block]

	Three Months Ended June 30,
(Dollars in thousands)	Pension Benefits		Other Benefits
	2012	2011	2012	2011
Service cost	$                   5	$                   6	$                   5	$                   5
Interest cost	11	13	9	11
Amortization of prior service cost	6	5	1	-
Net periodic benefit cost	$                 22	$                 24	$                 15	$                 16
	Six Months Ended June 30,
(Dollars in thousands)	Pension Benefits		Other Benefits
	2012	2011	2012	2011
Service cost	$                 11	$                 12	$                 10	$                 10
Interest cost	23	26	18	22
Amortization of prior service cost	11	10	1	-
Net periodic benefit cost	$                 45	$                 48	$                 29	$                 32

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Loans and Allowance for Loan and Lease Losses (Loan Portfolio Summarized By The Past Due Status) (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 485,982	$ 482,717	$ 479,582
Commercial and industrial [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due		141
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	22	663
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	470	1,052
Total Past Due	492	1,856
Financing Receivable, Recorded Investment, Current	76,629	75,074
Total	77,121	76,930	82,420
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
Commercial real estate [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	1,697	1,037
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	409	909
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	7,655	6,204
Total Past Due	9,761	8,150
Financing Receivable, Recorded Investment, Current	279,432	284,746
Total	289,193	292,896	295,527
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
Commercial real estate - construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	54	6
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due		584
Total Past Due	54	590
Financing Receivable, Recorded Investment, Current	32,843	30,145
Total	32,897	30,735	23,449
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
Lease financing [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, Current	1,624	1,724
Total	1,624	1,724	2,206
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
Residential mortgage [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	53	410
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due		11
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	751	691
Total Past Due	804	1,112
Financing Receivable, Recorded Investment, Current	51,886	47,158
Total	52,690	48,270	46,067
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
Home equity [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due		111
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	368	428
Total Past Due	368	539
Financing Receivable, Recorded Investment, Current	24,164	23,610
Total	24,532	24,149	22,266
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing
Consumer [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing Receivable, Recorded Investment, 30 to 59 Days Past Due	3	15
Financing Receivable, Recorded Investment, 60 to 89 Days Past Due	9	3
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	585	1
Total Past Due	597	19
Financing Receivable, Recorded Investment, Current	7,328	7,994
Total	7,925	8,013	7,647
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

12. Recent Accounting Pronouncements

There were no new accounting pronouncements affecting Mid Penn during the reporting periods.