This comprehensive report, updated October 27, 2025, presents a multi-faceted analysis of Mid Penn Bancorp, Inc. (MPB), assessing its business moat, financial statements, past performance, future growth, and intrinsic fair value. The analysis benchmarks MPB against key peers, including Univest Financial Corporation (UVSP), S&T Bancorp, Inc. (STBA), and Customers Bancorp, Inc. (CUBI), to provide crucial competitive context. All findings are interpreted through the proven investment philosophies of Warren Buffett and Charlie Munger for a deeper strategic perspective.
Mixed outlook for Mid Penn Bancorp. Growth is driven by acquisitions, which has significantly increased the bank's size. However, this growth has come at the cost of severe shareholder dilution. Consequently, earnings per share have declined over the past five years. The stock appears fairly valued with a low forward P/E ratio of 8.5. Recent operational performance is strong, but potential credit risks require monitoring.
US: NASDAQ
Mid Penn Bancorp, Inc. functions as a traditional community bank through its subsidiary, Mid Penn Bank. Its business model is straightforward and deeply rooted in the communities it serves across central and southeastern Pennsylvania, and more recently into New Jersey. The core operation involves gathering deposits from local individuals, small to medium-sized businesses, and municipalities, and then using these funds to originate loans. The majority of the bank's revenue, approximately 87%, is generated from net interest income, which is the spread between the interest it earns on loans and the interest it pays on deposits. The remaining 13% of revenue comes from noninterest or fee-based income, derived from services like wealth management, deposit account fees, and mortgage banking. This business model thrives on building long-term, personal relationships with customers, a strategy that allows it to compete against larger, less personalized national banks.
The bank's primary product, commercial lending, is the engine of its profitability, encompassing Commercial Real Estate (CRE) and Commercial & Industrial (C&I) loans. These loans, extended to local businesses and real estate investors, constitute the largest portion of the bank's assets and are the primary driver of its $181.7 million in annual net interest income. The market for these loans in Pennsylvania is intensely competitive and fragmented, featuring a wide array of competitors from national giants like JPMorgan Chase and PNC Bank to a host of other regional and community banks such as F.N.B. Corporation and Fulton Financial. The regional banking market's growth is generally tied to the broader economy, with loan demand fluctuating based on business confidence and interest rates. Mid Penn competes not by offering the lowest rates, but by providing responsive, localized service and leveraging its deep understanding of its specific markets. Its key competitors, often larger, possess greater scale, more advanced technology platforms, and a wider array of services. The customers for Mid Penn's commercial loans are typically small-to-medium enterprises (SMEs) and local real estate developers who are often underserved by larger financial institutions. These customers value direct access to decision-makers and a banking partner who understands the local economic landscape. This relationship-based approach fosters customer stickiness, as switching a business's primary lending and cash management services is a complex and disruptive process. The competitive moat for this product line is therefore built on this local expertise and customer intimacy. However, this moat is narrow, geographically constrained, and requires constant effort to maintain against competitors who may offer more attractive pricing or a broader product set.
Deposit gathering represents the other side of the balance sheet and is the critical funding source for the bank's lending activities. Mid Penn offers a standard suite of products including checking and savings accounts, money market accounts, and certificates of deposit (CDs) to a customer base of local residents, businesses, and public entities. As of the end of 2023, the bank held $4.4 billion in total deposits. The market for deposits is arguably even more competitive than the lending market, with banks, credit unions, and online-only fintech companies all vying for customer funds, particularly in a rising interest rate environment. Competition primarily revolves around interest rates paid on deposits, branch convenience, and the quality of digital banking tools. Mid Penn's cost of deposits stood at 1.72% in 2023, reflecting the industry-wide pressure to pay more to retain customer funds. Its main competitors for deposits are the same banks it competes with for loans. The customers for these products are the fabric of the local community. Stickiness is highest for core operating accounts (checking and savings) due to customer inertia; it is a significant hassle to change direct deposits, automated bill payments, and other integrated financial services. The moat in deposit gathering is derived from this customer inertia combined with the trust and convenience established by its physical branch network. For many small business customers who deal with cash, a local branch is a necessity. However, this moat is susceptible to erosion from digital competitors offering higher yields and superior online experiences, which particularly appeal to a younger demographic. The bank's ability to maintain a stable, low-cost core deposit base is a key determinant of its long-term profitability, and recent trends show this base is under pressure.
Fee-based services, while a smaller component of the business, are important for diversifying revenue away from its dependence on interest rates. This category includes wealth management and trust services, service charges on deposit accounts, and mortgage banking income, which collectively contributed $26.8 million in 2023. The wealth management market is attractive due to its high margins and potential for recurring revenue, but it is also crowded with specialized RIAs and the wealth divisions of large national banks. Similarly, the mortgage banking industry is highly cyclical and competitive, dominated by large, technology-driven national lenders like Rocket Mortgage. Mid Penn's customers for these services are often existing banking clients. Wealth management clients are typically higher-net-worth individuals, while mortgage customers are homebuyers within the bank's footprint. The competitive moat here is relatively weak. In wealth management, the primary advantage is the ability to cross-sell to a captive audience of banking customers, leveraging an existing relationship of trust. In mortgage banking, the advantage is local market knowledge and personalized service, but it is very difficult to compete on price and efficiency against national players. These fee-generating businesses provide a helpful, albeit modest, supplement to the bank's primary earnings stream, but they do not constitute a strong, standalone competitive advantage.
In conclusion, Mid Penn Bancorp's business model is that of a quintessential community bank, with a moat that is narrow and geographically defined. Its strength lies in its ability to build and maintain close relationships with small business customers in its specific Pennsylvania markets, a segment that larger banks may not serve as effectively. This creates a degree of loyalty and customer stickiness, particularly for its commercial lending and core deposit products. This relationship-based advantage is most pronounced in its successful SBA lending niche, where it has demonstrated specialized expertise.
However, the durability of this moat is questionable in the long term. The bank faces significant competitive threats from larger, more efficient regional banks that are increasingly targeting the same customer segments. Furthermore, the rise of digital banking continues to diminish the traditional advantages of a physical branch network. The bank's high dependence on net interest income makes its earnings vulnerable to interest rate fluctuations, a risk that its underdeveloped fee income streams do little to mitigate. While Mid Penn is a solid operator within its niche, its competitive advantages do not appear strong enough to generate superior, sustainable returns over the long term without excellent execution and potentially further scale through acquisitions.
Mid Penn Bancorp's financial health presents a dual narrative based on its latest reports. On the one hand, the bank demonstrates strong profitability and operational control, especially in its most recent quarter (Q3 2025). Revenue grew a significant 38.69% year-over-year, driving a 48.74% increase in net income to $18.3 million. This performance was supported by excellent cost management, as the bank's efficiency ratio improved to a strong 56.6%. This suggests the bank is effectively generating revenue without excessive spending, a key positive for shareholders.
The balance sheet appears resilient and well-capitalized. The tangible common equity to total assets ratio stood at 10.28% in the latest quarter, a strong buffer against potential losses and well above the typical regulatory comfort level. Liquidity also seems well-managed, with a loan-to-deposit ratio of 89.5%, indicating that the bank is not overly reliant on less stable funding sources to fuel its lending activities. Furthermore, the bank has minimal exposure to unrealized losses on its investment portfolio, with accumulated other comprehensive losses representing only 1.38% of its tangible equity, a notable strength compared to many peers.
However, there are red flags in the bank's credit profile that warrant caution. The allowance for credit losses as a percentage of gross loans is 0.77%, which appears somewhat thin for a community bank and is below the industry average that typically exceeds 1.0%. More concerning is the significant increase in 'Other Real Estate Owned and Foreclosed' assets, which jumped from just $0.04 million at the end of 2024 to $9.35 million in the latest quarter. While the absolute amount is small relative to total assets, this rapid increase signals potential stress in its loan portfolio. Overall, while the bank's earnings power and capital are strong, its financial foundation carries potential risk from its credit underwriting.
Over the last five fiscal years (FY2020-FY2024), Mid Penn Bancorp has pursued a strategy of rapid expansion through mergers and acquisitions. This has resulted in impressive top-line and balance sheet growth. Revenue grew at a compound annual growth rate (CAGR) of 14.9%, from $101.9 million to $177.7 million. This was driven by a 16.8% CAGR in gross loans and a 17.3% CAGR in total deposits. On the surface, this appears to be a success story. However, the cost of this growth was a massive increase in the number of shares outstanding, which ballooned by over 130% from 8.4 million to 19.4 million during this period, severely diluting existing shareholders.
The consequences of this dilution are most evident in the bank's profitability metrics. While net income grew at a healthy 17.2% CAGR, earnings per share (EPS) followed a volatile and ultimately negative path. After starting at $3.11 in 2020, EPS fell to as low as $2.29 in 2023 before recovering slightly to $2.90 in 2024, resulting in a negative five-year CAGR of -1.7%. Profitability has been mediocre and inconsistent, with Return on Equity (ROE) fluctuating between 7.1% and 10.9%. This performance is significantly weaker than that of competitors like S&T Bancorp and Fulton Financial, which consistently generate higher returns and operate more efficiently. MPB's efficiency ratio has shown no improvement with scale, hovering in the mid-60s, indicating poor cost control.
From a shareholder return perspective, the record is poor. The dividend per share has been stagnant at $0.80 since 2021, offering minimal growth for income investors. Although the payout ratio is conservative (typically 25-35%), this stability is overshadowed by the destruction of per-share value through dilution. Share buybacks have been practically nonexistent and insufficient to counteract the new shares issued for acquisitions. Consequently, total shareholder returns have lagged behind more disciplined peers like Orrstown Financial, which has demonstrated a better ability to translate growth into shareholder value.
In conclusion, Mid Penn's historical record reveals a clear strategic pattern: growth at any cost. The company has proven it can execute acquisitions to increase its size, but it has failed to demonstrate that this strategy creates sustainable value for its shareholders. The consistent dilution and volatile, declining per-share earnings do not support confidence in the bank's past execution or its ability to generate resilient returns without diluting its owners further.
The regional and community banking industry is poised for continued consolidation over the next 3-5 years, driven by the need for scale to absorb rising technology and compliance costs. The competitive landscape is intensifying, with larger national banks pushing down-market and fintechs capturing market share in payments and personal lending. Key shifts will include a greater emphasis on digital channels for customer acquisition and service, and an increasing focus on diversifying revenue streams away from net interest income. Catalysts for demand will be tied to regional economic health, particularly in small business formation and construction, though higher interest rates may temper loan demand. The market for regional banking services is expected to grow at a modest CAGR of 2-3%, with growth in noninterest income services like wealth management outpacing traditional lending. For banks like Mid Penn, the barrier to entry isn't starting a new bank, but achieving the scale necessary to compete effectively on technology, product breadth, and pricing.
Mid Penn's primary engine for future growth is its commercial lending portfolio, which is split between Commercial Real Estate (CRE) and Commercial & Industrial (C&I), including its specialized SBA lending. Today, consumption of these loans is driven by small-to-medium-sized businesses (SMEs) within its Pennsylvania and New Jersey footprint. However, demand is constrained by the higher interest rate environment, which increases borrowing costs and can delay capital expenditure or expansion plans for its clients. Over the next 3-5 years, growth in C&I and SBA lending is expected to increase, particularly if the bank successfully integrates acquisitions and expands its geographic reach. This growth will be fueled by its relationship-based model, which appeals to SMEs underserved by larger banks. Conversely, CRE loan growth, especially in segments like office space, may decrease or stagnate due to valuation concerns and remote work trends. The overall C&I lending market for regional banks is projected to grow 3-4% annually. For MPB to outperform, it must leverage its SBA expertise to capture a disproportionate share of new business formation. However, it faces stiff competition from peers like F.N.B. Corporation and Fulton Financial, who have greater scale and lending capacity. A key risk is a regional economic downturn, which could depress loan demand and increase credit losses. The probability of a mild regional slowdown in the next 3-5 years is medium, which could reduce MPB's loan growth to 1-2% annually.
Deposit gathering remains the critical funding component for Mid Penn's growth ambitions, but it represents a significant challenge. Currently, the deposit mix is shifting away from low-cost sources, with noninterest-bearing deposits shrinking as a percentage of the total. Consumption is constrained by intense competition for deposits, forcing the bank to offer higher rates on CDs and money market accounts to retain and attract funds. This trend is expected to persist over the next 3-5 years, keeping the bank's funding costs elevated. The primary area for growth will be in capturing the core operating accounts of its commercial lending clients, which tend to be stickier and less price-sensitive. A potential catalyst would be the successful rollout of enhanced treasury management services, which can deepen relationships with business customers. The market for local deposits is effectively a zero-sum game, with an estimated 1-2% annual growth tied to local economic expansion. MPB's success depends on its ability to win share from competitors by providing superior service. The risk is that larger competitors with more advanced digital platforms and broader brand recognition will continue to attract deposits more effectively. There is a high probability that MPB's cost of deposits will remain elevated relative to peers, compressing its net interest margin and limiting the profitability of its future loan growth.
Finally, the expansion of fee-based services, particularly wealth management and treasury services, represents a crucial but underdeveloped growth opportunity. Current consumption of these services by MPB's customer base is low, as reflected in the fact that noninterest income is only 13% of total revenue. This is limited by the bank's current scale, product suite, and level of investment in these areas. Over the next 3-5 years, the bank must increase the adoption of these services among its existing commercial and retail customers. This will involve a shift from a transaction-based mindset to a more holistic advisory relationship. The key reason for this potential growth is revenue diversification, reducing the bank's sensitivity to interest rate cycles. The U.S. wealth management market for the mass affluent is expected to grow at a CAGR of 5-7%. To capture this, MPB must compete against specialized RIAs and the well-established wealth divisions of larger banks. The primary risk is execution; building out a competitive wealth management or treasury services platform requires significant investment in talent and technology. There is a medium probability that MPB's investments in this area will be too slow or too small to gain meaningful market share, leaving it reliant on its core spread-lending business. This would perpetuate a key strategic weakness and limit its long-term earnings growth potential.
As of October 27, 2025, with a stock price of $28.91, Mid Penn Bancorp's valuation presents a mixed but ultimately balanced picture. A triangulated analysis suggests the bank is trading near its fair value, with limited upside based on current fundamentals. The company's price of $28.91 falls within a fair value estimate of $28.00–$33.50, suggesting it is fairly valued with only a small margin of safety.
From a multiples perspective, MPB's valuation on an earnings basis appears reasonable. Its Trailing Twelve Month (TTM) P/E ratio of 12.24 is slightly above the regional bank industry average. However, its forward P/E of 8.5 is more attractive and sits below the peer average, indicating analyst expectations for strong earnings growth. A conservative approach using a 9x-10x forward multiple yields a fair value range of $30.60 - $34.00, suggesting some potential upside.
For banks, the Price-to-Tangible-Book-Value (P/TBV) is a primary valuation tool. With a tangible book value per share of $27.96, MPB’s P/TBV ratio is 1.03x. This means the market values the company at a slight premium to its tangible net worth, which is slightly below its peers on this metric. A fair P/TBV multiple for a bank with MPB’s profitability (ROE of 9.31%) is typically between 1.0x and 1.2x, implying a fair value range of $27.96 to $33.55. This method is weighted most heavily as it reflects the balance sheet-driven nature of the banking business.
From a yield standpoint, the company offers a dividend yield of 2.99%, which is slightly below the regional bank average, though its payout ratio of 34.04% is healthy and sustainable. A significant negative, however, is the substantial increase in shares outstanding, which dilutes shareholder value and offsets the income from the dividend. By triangulating these methods and placing the most emphasis on the asset-based P/TBV approach, a fair value range of $28.00 – $33.50 seems appropriate, positioning the stock as fairly valued at its current price.
Bill Ackman would likely view Mid Penn Bancorp as a non-starter, as it fails to meet his high threshold for quality and dominance. His investment thesis in banking would require a simple, predictable, and scalable franchise with a strong competitive moat, which MPB, with its modest ~4% market share in its home county and subpar profitability metrics like a Return on Assets (ROA) of ~0.75%, clearly lacks. The bank’s primary strategy of growth-by-acquisition is a red flag, as it signals a lack of strong organic growth prospects and introduces significant integration risk without delivering superior returns. While the stock's valuation below tangible book value might seem appealing, Ackman prioritizes excellent businesses at fair prices over mediocre businesses at cheap prices. Ackman would conclude that MPB is a small, undifferentiated player in a crowded field, lacking the high-quality characteristics he seeks and would therefore avoid the stock. Forced to choose in the regional banking sector, Ackman would gravitate towards quality and unique platforms like Fulton Financial (FULT) for its dominant scale and consistent profitability (ROA ~1.2%), Customers Bancorp (CUBI) for its high-growth, tech-driven model and superior efficiency (<40%), and S&T Bancorp (STBA) as a high-quality, efficient operator (ROA >1.2%). Ackman might only become interested in MPB if a clear, high-probability sale of the company to a larger institution at a significant premium was imminent, turning it into a short-term event-driven play.
Warren Buffett approaches banking as an industry where simplicity, a low-cost deposit base, and conservative management are paramount. In 2025, he would view Mid Penn Bancorp as an understandable community bank but would be deterred by its mediocre performance metrics. The bank's Return on Assets (ROA) of around 0.75% and Return on Tangible Common Equity (ROTCE) near 10% fall short of the high-quality thresholds he prefers, signaling a lack of a durable competitive advantage or pricing power. Furthermore, its high efficiency ratio in the high 60s indicates operational bloat, and its heavy reliance on acquisitions for growth introduces significant execution risk without necessarily creating per-share value. While the stock's valuation below tangible book value might seem tempting, Buffett would see it as a classic 'value trap'—a cheap price for a fair, but not wonderful, business. The takeaway for retail investors is that a low price tag cannot compensate for subpar business fundamentals, and better-run banks exist. If forced to choose top regional banks, Buffett would favor high-quality operators like S&T Bancorp (STBA) and Fulton Financial (FULT), which consistently generate ROAs above 1.2% and demonstrate superior efficiency, even if it means waiting for a more attractive purchase price. Buffett's opinion would only change if MPB showed a clear, sustained path to improving its core profitability and efficiency without relying on M&A, or if its stock price fell to a level offering an exceptionally wide margin of safety.
Charlie Munger would approach a regional bank like Mid Penn Bancorp with a simple thesis: invest in straightforward businesses that have a durable, low-cost deposit moat and are run by rational managers who avoid making stupid mistakes, primarily in credit underwriting and acquisitions. MPB would not appeal to him, as its core profitability metrics are mediocre; its Return on Average Assets (ROA) of around 0.75% is well below the 1.0%+ that indicates a high-quality bank. Furthermore, its efficiency ratio in the high 60s shows a lack of scale or cost discipline compared to best-in-class peers. The primary risk Munger would identify is the bank's heavy reliance on a 'growth-by-acquisition' strategy, a common path to value destruction if management overpays or fails to integrate effectively. Management primarily uses its cash to fund these acquisitions and pay a dividend, but the M&A strategy has yet to yield superior profitability, suggesting capital could be better allocated. In the 2025 environment, Munger would avoid MPB, viewing it as a low-quality business trading at a cheap price, which is a classic value trap he would sidestep. If forced to choose top regional banks, Munger would likely favor Fulton Financial (FULT) for its scale and consistent ~1.2% ROA, S&T Bancorp (STBA) for its dominant local moat and superior efficiency, and Univest (UVSP) for its profitable, diversified business model. Munger's decision on MPB would only change if the bank could demonstrate a multi-year track record of significantly improving its organic profitability and efficiency, proving its M&A strategy creates, rather than just dilutes, shareholder value.
Mid Penn Bancorp, Inc. operates as a traditional community bank, primarily serving central and southeastern Pennsylvania. Its core strategy revolves around building deep customer relationships and growing through strategic acquisitions of smaller banks. This has allowed MPB to expand its footprint and asset base significantly over the past decade. However, this growth-by-acquisition model brings challenges, including the need to successfully integrate different banking cultures and systems, which can impact short-term profitability and efficiency.
When compared to the broader competitive landscape, MPB occupies a challenging middle ground. It is not large enough to benefit from the significant economies of scale enjoyed by super-regional banks like F.N.B. Corporation or Fulton Financial, which allows them to invest more heavily in technology and offer more competitive pricing. At the same time, it faces pressure from smaller, highly localized community banks and credit unions that may have deeper roots in specific towns or counties. This positioning means MPB must execute flawlessly on its relationship-banking model to retain and attract customers.
From a financial standpoint, MPB's performance is solid but rarely spectacular. Its profitability, measured by key metrics like Return on Assets (ROA), often hovers around or slightly below the industry benchmark of 1%, which many of its stronger peers consistently exceed. Similarly, its efficiency ratio, which measures the cost to generate a dollar of revenue, tends to be higher than more scaled competitors. This indicates that while the bank is competently managed, it lacks a distinct competitive advantage that translates into superior financial returns for shareholders.
Ultimately, an investment in Mid Penn Bancorp is a bet on its management's ability to continue acquiring and integrating smaller banks effectively, while gradually improving its core operational efficiency. The bank's value proposition is tied to its local focus and a potentially lower valuation compared to its peers. However, investors must weigh this against the persistent competitive pressures from larger and more nimble rivals in the highly fragmented Pennsylvania banking market.
Univest Financial Corporation and Mid Penn Bancorp are both Pennsylvania-focused banks, but Univest presents a more diversified and profitable profile. With a larger asset base and a significant presence in the attractive Philadelphia suburban markets, Univest operates a more complex business model that includes banking, wealth management, and insurance services. This diversification provides multiple revenue streams and deeper customer relationships compared to MPB's more traditional focus on core lending and deposit-gathering. While both banks compete on local service, Univest's superior scale and stronger financial metrics generally position it as a higher-quality institution, which is often reflected in its premium valuation compared to MPB.
In terms of Business & Moat, Univest has a clear edge. Its brand is stronger in its core, affluent markets, holding a significant deposit market share in key counties like Montgomery (~10%). In contrast, MPB's brand is more recognized in central Pennsylvania, with a lower share in its main markets like Dauphin County (~4%). Switching costs are similarly high for both due to sticky customer relationships. However, Univest’s scale is a major advantage, with ~$7.5 billion in assets versus MPB’s ~$5.1 billion, leading to better operating leverage. Furthermore, Univest’s integrated network of banking, wealth, and insurance services creates a stickier customer ecosystem, a network effect MPB largely lacks. Regulatory barriers are comparable for both. Overall Winner for Business & Moat: Univest Financial Corporation, due to its superior scale, brand strength in key markets, and diversified business model.
From a financial statement perspective, Univest consistently outperforms MPB. Univest typically demonstrates stronger revenue growth from its diversified segments. Its profitability is superior, with a Return on Average Assets (ROA) that is often above the 1.0% industry benchmark, whereas MPB's ROA has historically been lower, recently around 0.75%. This means Univest generates more profit from its assets. Univest also tends to run more efficiently, with a lower efficiency ratio (costs as a percentage of revenue) in the low 60s compared to MPB's which can be in the high 60s. Both maintain solid liquidity and capital levels, but Univest’s ability to generate higher returns makes it financially stronger. On dividends, both offer competitive yields, but Univest's earnings provide a more comfortable coverage. Overall Financials Winner: Univest Financial Corporation, for its superior profitability and efficiency.
Looking at past performance, Univest has delivered more consistent results. Over the last five years, Univest has generally shown more stable earnings per share (EPS) growth compared to MPB, whose growth has been more reliant on the timing of acquisitions. In terms of shareholder returns, Univest's Total Shareholder Return (TSR) over a five-year period has often outpaced MPB's, reflecting its stronger fundamental performance. For example, in the five years leading up to 2024, UVSP has shown a more stable upward trend in its stock price. In terms of risk, both stocks exhibit similar volatility (beta around 1.0), but MPB's higher reliance on M&A can introduce integration risk. Winner for growth, margins, and TSR is Univest; risk is roughly even. Overall Past Performance Winner: Univest Financial Corporation, due to its more consistent organic growth and shareholder returns.
For future growth, Univest appears better positioned. Its operations are centered in the economically vibrant and wealthy suburban Philadelphia region, providing a strong base for organic loan and deposit growth. MPB's core markets in central Pennsylvania are generally slower-growing. While MPB's explicit strategy is growth-by-acquisition, this path is opportunistic and carries integration risks. Univest's diversified business lines, particularly wealth management, offer cross-selling opportunities that can drive non-interest income growth, an area where MPB is less developed. Univest has the edge in organic market demand and a more balanced growth strategy. Overall Growth Outlook Winner: Univest Financial Corporation, due to its presence in more dynamic markets and stronger cross-selling potential.
In terms of valuation, MPB often trades at a discount to Univest, which is its main appeal. MPB's Price-to-Tangible Book Value (P/TBV) ratio is frequently below 1.0x, while Univest typically trades at a premium, often in the 1.2x to 1.4x range. This premium for Univest is justified by its higher profitability (Return on Tangible Common Equity often >15% vs. MPB's ~10%) and more stable earnings stream. MPB's dividend yield might sometimes be higher, reflecting its lower stock price. From a pure value perspective, MPB looks cheaper, but this comes with lower quality. The better value today, on a risk-adjusted basis, is arguably Univest, as its performance justifies its valuation. Which is better value today: Univest Financial Corporation, as its premium valuation is supported by superior financial quality.
Winner: Univest Financial Corporation over Mid Penn Bancorp, Inc. The verdict is based on Univest's superior scale (~$7.5B vs. ~$5.1B in assets), consistently higher profitability (ROA over 1.0% vs. MPB's sub-1.0%), and a more diversified business model that includes lucrative wealth management and insurance arms. Univest’s key strength is its strong foothold in the economically robust Philadelphia suburbs, which provides a fertile ground for organic growth. MPB’s primary weakness is its lower profitability and reliance on acquisitions for growth, which is less predictable. While MPB often trades at a cheaper valuation (lower P/TBV), this discount reflects its comparatively weaker financial profile, making Univest the stronger overall choice for investors seeking quality and stability.
S&T Bancorp, Inc. represents a larger, more established regional bank competitor to Mid Penn Bancorp. With a history stretching back over a century and a larger asset base, S&T has a more significant presence across Pennsylvania and into Ohio, offering a wider range of commercial and consumer banking services. Its larger scale provides it with greater operational efficiencies and the ability to underwrite larger, more complex commercial loans than MPB can. While both are Pennsylvania-based, S&T operates on a different level, competing more directly with other large regional players. MPB, in contrast, remains a classic community bank focused on smaller clients and M&A-driven expansion in its specific geographic niche.
Analyzing their Business & Moat, S&T Bancorp has a distinct advantage. Its brand is more widely recognized across Western Pennsylvania, with a strong market share in counties like Indiana (over 50%), a level of dominance MPB lacks in any single market. Switching costs are comparable for both banks. The most significant difference is scale; S&T's asset base of ~$9.2 billion dwarfs MPB's ~$5.1 billion, which translates directly into a better efficiency ratio and broader lending capabilities. S&T also has a more developed wealth management division, enhancing its network effect with clients. Regulatory hurdles are similar for both. Overall Winner for Business & Moat: S&T Bancorp, Inc., due to its much larger scale, dominant brand in its home market, and more developed non-banking services.
Financially, S&T Bancorp is a stronger performer. S&T consistently generates higher profitability, with its Return on Assets (ROA) typically well above the 1.0% industry standard, often reaching 1.2% or higher, while MPB struggles to stay near 0.75%. This indicates superior underwriting and cost control. S&T's efficiency ratio is also superior, often in the mid-to-high 50s, a direct result of its scale, compared to MPB's figures in the high 60s. This means S&T spends significantly less to produce each dollar of revenue. In terms of balance sheet strength, both maintain adequate capital, but S&T's consistent earnings power provides a more robust foundation. S&T's dividend is also supported by a lower, safer payout ratio. Overall Financials Winner: S&T Bancorp, Inc., based on its superior profitability and operational efficiency.
Examining past performance, S&T Bancorp has a track record of more stable and predictable earnings. Over the last five years, S&T has maintained a relatively steady Net Interest Margin (NIM) and has managed its credit quality effectively through economic cycles. Its five-year Total Shareholder Return (TSR) has generally been more stable than MPB's, which can be more volatile due to its M&A activities and smaller size. While MPB has shown faster asset growth (largely from acquisitions), S&T has delivered better bottom-line EPS growth and margin stability. In terms of risk, S&T's larger, more diversified loan book makes it inherently less risky than MPB's more concentrated portfolio. Overall Past Performance Winner: S&T Bancorp, Inc., for delivering more consistent profitability and superior risk-adjusted returns.
Looking at future growth prospects, S&T has a more balanced approach. It can pursue growth organically through its established commercial lending platforms in both Pennsylvania and Ohio and also has the capacity for strategic acquisitions. Its focus on commercial and industrial (C&I) lending ties its growth to broader economic activity. MPB's future growth is more heavily dependent on identifying and executing M&A deals in the competitive Pennsylvania market. While this can lead to rapid expansion, it is less predictable than the organic growth S&T can generate. S&T’s established platform gives it an edge in predictable growth. Overall Growth Outlook Winner: S&T Bancorp, Inc., due to its stronger foundation for organic growth and greater strategic flexibility.
From a valuation standpoint, S&T Bancorp typically trades at a premium to Mid Penn Bancorp, and for good reason. S&T's Price-to-Tangible Book Value (P/TBV) ratio often hovers around 1.3x - 1.5x, while MPB frequently trades below 1.0x. This premium is a direct reflection of S&T's superior profitability, particularly its higher Return on Tangible Common Equity (ROTCE), which is often in the mid-to-high teens versus MPB's ~10%. Investors are willing to pay more for S&T's higher quality and more predictable earnings stream. While MPB is 'cheaper' on paper, it does not represent better value when accounting for its weaker performance metrics. Which is better value today: S&T Bancorp, Inc., as its premium is justified by its superior financial performance and lower risk profile.
Winner: S&T Bancorp, Inc. over Mid Penn Bancorp, Inc. S&T is the clear winner due to its significant advantages in scale (~$9.2B vs ~$5.1B assets), operational efficiency (efficiency ratio in the 50s vs. 60s), and profitability (ROA consistently >1.2% vs. MPB's sub-1.0%). S&T's key strengths are its established brand, diversified loan portfolio, and consistent earnings power, which make it a lower-risk investment. MPB's main weakness is its lack of scale, which leads to higher costs and lower returns. While MPB might appeal to deep value investors due to its lower P/TBV ratio, S&T represents a much higher-quality banking institution that has proven its ability to generate superior returns for shareholders over the long term.
Customers Bancorp, Inc. (CUBI) and Mid Penn Bancorp represent two vastly different banking strategies. While MPB is a traditional community bank focused on relationship-based lending in a specific geographic area, CUBI operates a high-tech, branch-light model with a national reach, specializing in niche areas like specialty commercial lending and Banking-as-a-Service (BaaS). CUBI is known for its rapid growth, digital-first approach, and innovative products, such as its real-time payments platform. This makes a direct comparison challenging, as CUBI is more of a fintech-oriented bank, whereas MPB is a classic 'main street' lender. CUBI's model offers higher growth potential but also comes with different, and potentially higher, risks.
In the Business & Moat comparison, the two banks are fundamentally different. MPB's moat is built on local relationships and brand recognition in central PA, a traditional banking advantage. CUBI's moat, however, comes from technology and specialization. Its brand is known nationally within its fintech and commercial niches. Switching costs for MPB's small business clients are high, while CUBI's moat comes from its proprietary technology platforms like the Customers Bank Instant Token (CBIT™) for crypto clients, which creates very high switching costs. In terms of scale, CUBI is significantly larger, with over ~$21 billion in assets compared to MPB's ~$5.1 billion. This scale, combined with its branch-light model, gives CUBI a massive efficiency advantage. CUBI also benefits from network effects within its BaaS ecosystem. Overall Winner for Business & Moat: Customers Bancorp, Inc., due to its modern, tech-driven moat, superior scale, and national reach.
Financially, Customers Bancorp operates on a different plane. Driven by its specialty lending and digital banking services, CUBI has demonstrated explosive revenue and earnings growth that far outpaces traditional banks like MPB. Its profitability can be exceptional, with a Return on Assets (ROA) that has at times exceeded 1.5%, double what MPB typically generates. Its digital model leads to a best-in-class efficiency ratio, often falling below 40%, whereas MPB's is in the high 60s. However, CUBI's balance sheet carries different risks; its loan book is concentrated in specialized commercial areas and its funding base relies more on non-core deposits from its digital partners. While both have adequate capital, CUBI's risk profile is higher, but so are its returns. CUBI does not pay a dividend, reinvesting all earnings for growth, while MPB offers a regular dividend. Overall Financials Winner: Customers Bancorp, Inc., for its vastly superior growth and profitability, albeit with a higher-risk business model.
Analyzing past performance highlights CUBI's dynamic nature. Over the past five years, CUBI has delivered extraordinary growth, with its EPS growing at a CAGR well into the double digits, dwarfing MPB's M&A-fueled growth. This has translated into spectacular Total Shareholder Return (TSR) for CUBI during its high-growth phases, although its stock is also significantly more volatile, with much larger drawdowns during periods of market stress (beta often >1.5). MPB's stock performance has been much more staid and stable. CUBI's margins, particularly its Net Interest Margin (NIM), can fluctuate based on its lending activities and funding costs, but its operational efficiency has consistently improved. Overall Past Performance Winner: Customers Bancorp, Inc., for delivering vastly superior growth and shareholder returns, despite higher volatility.
For future growth, CUBI has far more avenues than MPB. Its growth is tied to the expansion of the digital economy, fintech partnerships, and its ability to innovate in financial services. Its national platform provides a much larger Total Addressable Market (TAM) than MPB's Pennsylvania footprint. While there are risks, such as increased regulatory scrutiny of BaaS models and competition from other digital banks, its potential for expansion is immense. MPB's growth is largely limited to the slow-growing Pennsylvania market and its ability to find acquisition targets. There is little contest here. Overall Growth Outlook Winner: Customers Bancorp, Inc., due to its innovative business model and national growth platform.
Valuation is where the comparison gets interesting. Despite its superior growth and profitability, CUBI often trades at a surprisingly low valuation, with a Price-to-Earnings (P/E) ratio sometimes in the single digits, similar to or even lower than MPB. Its Price-to-Tangible Book Value (P/TBV) ratio has also been very modest, often near or below 1.0x. This discount reflects market skepticism about the sustainability of its growth and the higher risks associated with its niche lending and fintech-dependent model. MPB trades like a typical, slow-growing community bank. Given CUBI's high performance metrics, its valuation appears exceptionally cheap, offering far more potential upside. Which is better value today: Customers Bancorp, Inc., as it offers hyper-growth and high profitability at a value price, a rare combination.
Winner: Customers Bancorp, Inc. over Mid Penn Bancorp, Inc. This verdict is based on CUBI’s overwhelmingly superior growth, profitability, and efficiency, driven by a modern, technology-focused business model. CUBI’s key strengths are its massive scale advantage (~$21B vs. ~$5.1B assets), best-in-class efficiency ratio (<40%), and high ROA (>1.5%). Its national platform and fintech partnerships provide a growth runway that MPB cannot match. MPB's primary weakness in this comparison is its traditional, slow-moving model, which produces average results. While CUBI's model carries higher regulatory and concentration risks, its rock-bottom valuation relative to its performance makes it a far more compelling investment opportunity than the slow-and-steady MPB.
Orrstown Financial Services, Inc. is arguably one of Mid Penn Bancorp's closest and most direct competitors. Both are similarly sized community banks with a primary focus on South-Central Pennsylvania, and both have grown through a series of local acquisitions. They compete for the same customers—small-to-medium-sized businesses and local individuals—and offer a nearly identical suite of traditional banking products and services. The comparison between the two provides a clear look at operational execution within the same market, as neither possesses a significant structural advantage over the other. The key differentiators come down to management strategy, credit quality, and operational efficiency.
When comparing Business & Moat, the two banks are nearly identical. Both have established brands within their overlapping territories, with Orrstown having deep roots in Franklin County (~25% market share) and MPB being stronger in Dauphin County (~4% market share). Switching costs are high and comparable for both. Their scale is very similar, with Orrstown having assets of ~$3.0 billion versus MPB's ~$5.1 billion. MPB has a slight scale advantage due to more aggressive M&A recently. Neither has significant network effects beyond standard community banking relationships. Regulatory barriers are identical. This is as close to a draw as it gets. Overall Winner for Business & Moat: Mid Penn Bancorp, Inc., by a narrow margin, due to its slightly larger scale giving it a minor edge in operating leverage and lending capacity.
In a head-to-head financial comparison, the differences in execution become apparent. Historically, Orrstown has demonstrated slightly better profitability metrics. Orrstown's Return on Assets (ROA) has often been closer to the 1.0% industry benchmark, while MPB has more frequently been in the 0.7% - 0.8% range. This suggests Orrstown has had better control over its costs or a more profitable loan portfolio. Orrstown has also generally posted a better efficiency ratio, indicating a leaner operation. For example, in recent periods, Orrstown’s efficiency ratio has been in the low 60s, while MPB's has trended toward the high 60s. Both maintain solid capital and liquidity. Overall Financials Winner: Orrstown Financial Services, Inc., for its historically stronger profitability and better operational efficiency.
Reviewing past performance, both banks have traveled a similar path of M&A-led growth. Both have seen their assets grow substantially over the last five to ten years. However, Orrstown's stock has often delivered a better Total Shareholder Return (TSR) over 3- and 5-year periods, reflecting its stronger bottom-line performance. While MPB's revenue growth may have been higher in certain years due to the timing of larger acquisitions, Orrstown has been more effective at translating that growth into shareholder value through better profitability. Risk profiles are very similar, with both stocks carrying comparable volatility and credit risk exposure to the local economy. Overall Past Performance Winner: Orrstown Financial Services, Inc., due to its superior track record of profitability and shareholder returns.
In terms of future growth, both banks face the same opportunities and challenges. Their growth is tied to the economic health of South-Central Pennsylvania and their ability to continue consolidating smaller local banks. MPB has been more aggressive on the M&A front recently, which could give it an edge in terms of future asset growth, but this also comes with greater integration risk. Orrstown's strategy appears more focused on optimizing its existing franchise and pursuing disciplined, smaller acquisitions. Neither has a clear, overwhelming advantage in growth drivers; it will come down to which management team executes better. This category is effectively a tie. Overall Growth Outlook Winner: Even, as both are reliant on the same limited growth levers of M&A and slow organic growth in their shared market.
Valuation is typically very close for these two direct competitors. Both banks usually trade at a discount to the broader banking sector, with Price-to-Tangible Book Value (P/TBV) ratios that are often below 1.0x. Their Price-to-Earnings (P/E) ratios are also comparable, usually in the high single digits. Given Orrstown's slightly better profitability and efficiency, one could argue it deserves a small premium over MPB. If they are trading at similar multiples, Orrstown likely represents the better value, as you are paying the same price for a slightly higher-performing bank. Which is better value today: Orrstown Financial Services, Inc., as it often trades at a similar valuation to MPB but with superior historical performance metrics.
Winner: Orrstown Financial Services, Inc. over Mid Penn Bancorp, Inc. In a contest between two very similar community banks, Orrstown wins by a slight margin based on its track record of superior operational execution. Its key strengths are its consistently better profitability (higher ROA) and efficiency (lower efficiency ratio), demonstrating a more disciplined approach to cost management and lending. MPB's main weakness in this comparison is its slightly lagging performance on these core metrics, despite its more aggressive acquisition strategy. While MPB has achieved greater size, it hasn't yet translated that scale into better returns than its closest competitor. For investors choosing between these two local players, Orrstown's history of stronger performance makes it the more compelling choice.
LINKBANCORP, Inc. is a newer and smaller competitor to Mid Penn Bancorp, but one that has been built with a similar strategy of consolidating community banks in Central and Southeastern Pennsylvania. Formed through a merger of equals, LINKBANCORP is aggressively trying to build scale in the same markets where MPB operates. This makes it a direct and hungry competitor. The core difference is that MPB is a more established entity with a longer track record, while LINK is the newer, more dynamic player still in the process of integrating its foundational mergers and establishing its identity. The comparison is one of an established incumbent versus an ambitious challenger.
From a Business & Moat perspective, Mid Penn Bancorp has the advantage of incumbency. MPB's brand has been established for over 150 years, giving it deep roots and name recognition in its core markets, like its ~4% deposit share in Dauphin County. LINK, being a newer entity, is still building its brand awareness. Switching costs are similar for both. MPB has a clear scale advantage with ~$5.1 billion in assets versus LINK's ~$2.8 billion. This larger size gives MPB the ability to handle larger loans and provides greater operational leverage. Neither has a significant network effect beyond basic banking. Regulatory burdens are comparable. Overall Winner for Business & Moat: Mid Penn Bancorp, Inc., based on its established brand, longer history, and superior scale.
Financially, the comparison reflects their different stages of development. MPB, as a more mature bank, delivers relatively stable, albeit modest, financial results. Its key metrics like Return on Assets (ROA) of ~0.75% and an efficiency ratio in the high 60s are predictable. LINK, on the other hand, is still dealing with merger-related expenses and integration costs, which can temporarily depress its reported profitability and inflate its efficiency ratio. However, on an adjusted or 'core' basis, LINK's management is targeting strong performance. MPB is the more proven entity today, but LINK may have more potential for improvement as it achieves synergies from its mergers. For now, MPB's established track record is stronger. Overall Financials Winner: Mid Penn Bancorp, Inc., based on its current, more stable and proven financial performance.
When examining past performance, MPB has a much longer history to analyze. It has a multi-decade track record as a public company, showing steady, M&A-driven growth. LINKBANCORP, in its current form, is only a few years old, so long-term performance metrics are not available. In the short term, MPB's stock performance and dividend history are more stable. LINK's stock is more of a 'show-me' story, and its performance will depend heavily on its ability to successfully integrate its merged banks and deliver on its projected cost savings and growth. MPB's longer, more predictable history gives it the win here. Overall Past Performance Winner: Mid Penn Bancorp, Inc., due to its long and stable operating history.
Future growth is where LINKBANCORP becomes more compelling. As a smaller and more nimble organization, LINK has the potential for much faster percentage growth. Its entire reason for being is to act as a consolidator, and its management team is highly focused on M&A. With a smaller asset base, any single acquisition will have a much larger impact on its growth rate compared to MPB. MPB will also pursue M&A, but its larger size means it needs to find bigger deals to move the needle. LINK's hunger and smaller base give it a higher potential growth trajectory, albeit with higher execution risk. Overall Growth Outlook Winner: LINKBANCORP, Inc., for its higher potential for rapid, M&A-driven growth off a smaller base.
In terms of valuation, both banks often trade at similar multiples, typically below their tangible book value. Both are seen by the market as small, traditional community banks. However, an argument can be made that LINKBANCORP offers better value. An investment in LINK is a bet on its management team successfully executing its consolidation strategy, which could lead to significant value creation as synergies are realized and the bank's profitability improves. MPB, being more mature, has less potential for dramatic operational improvement. Therefore, for a similar price (e.g., P/TBV ratio around 0.9x for both), LINK offers more upside potential. Which is better value today: LINKBANCORP, Inc., as it offers a more compelling growth and transformation story for a similar 'value' price.
Winner: Mid Penn Bancorp, Inc. over LINKBANCORP, Inc. (with a caveat). The verdict goes to MPB today based on its proven track record, superior scale (~$5.1B vs. ~$2.8B assets), and more stable financial profile. MPB's key strength is its established position as a reliable community bank, making it the lower-risk choice. LINK's primary weakness is its short operating history and the execution risk associated with its merger-intensive strategy. However, this verdict comes with a significant caveat: LINK offers substantially more upside potential. For conservative, income-oriented investors, MPB is the better choice. For investors with a higher risk tolerance seeking capital appreciation, LINK's compelling growth story makes it the more intriguing long-term investment.
Fulton Financial Corporation is a super-regional bank that operates in a different league than Mid Penn Bancorp. With a multi-state footprint and a significantly larger balance sheet, Fulton competes with national players as well as regional banks. It offers a sophisticated suite of products, including wealth management, investment services, and large-scale commercial lending, that are beyond the scope of a community bank like MPB. The comparison highlights the immense structural advantages that come with scale in the banking industry. For MPB, Fulton is not just a competitor but an existential threat in the markets where they overlap, as Fulton can offer more competitive pricing and a broader range of services.
When evaluating Business & Moat, Fulton's superiority is undeniable. Its brand is widely recognized across the Mid-Atlantic region, backed by a large marketing budget and a sprawling branch network. Its scale is the most critical differentiator: Fulton's asset base of over ~$27 billion is more than five times larger than MPB's ~$5.1 billion. This massive scale advantage allows Fulton to invest heavily in technology, maintain a much lower efficiency ratio, and spread its fixed costs over a huge revenue base. Fulton also has a well-developed wealth management arm with billions in assets under management, creating a powerful network effect and sticky, high-value client relationships that MPB cannot replicate. Overall Winner for Business & Moat: Fulton Financial Corporation, by a landslide, due to its overwhelming advantages in scale, brand recognition, and diversified services.
From a financial standpoint, Fulton is a much stronger and more consistent performer. Fulton’s scale enables it to achieve an efficiency ratio in the low 60s or even high 50s, far superior to MPB's high 60s. This cost efficiency drops directly to the bottom line, allowing Fulton to consistently produce a Return on Assets (ROA) above the 1.0% benchmark, often in the 1.2% range, while MPB is typically lower. Fulton’s net interest income is orders of magnitude larger, and its diversified fee-based businesses provide a stable source of non-interest income. On the balance sheet, Fulton’s size allows it to maintain a more diversified loan portfolio, reducing concentration risk compared to MPB. Its dividend is reliable and backed by strong, consistent earnings. Overall Financials Winner: Fulton Financial Corporation, for its superior efficiency, profitability, and earnings diversification.
Fulton's past performance reflects its status as a stable, blue-chip regional bank. Over the past decade, it has delivered steady, predictable earnings growth and has a long history of paying and increasing its dividend. Its Total Shareholder Return (TSR) has been less volatile and more consistent than MPB's. While MPB's growth in percentage terms can look high during years with acquisitions, Fulton's growth in absolute dollar terms is far greater and comes with less execution risk. Fulton's credit quality has also been consistently strong through various economic cycles, reflecting disciplined underwriting. In contrast, MPB's performance is more variable and dependent on the success of its M&A strategy. Overall Past Performance Winner: Fulton Financial Corporation, due to its long track record of stable growth, consistent profitability, and lower-risk profile.
Looking ahead, Fulton’s future growth is driven by its ability to gain market share across its large, multi-state footprint and deepen relationships with existing clients through cross-selling its wide array of products. It can grow organically by leveraging its brand and technology, and it has the financial capacity to make large, strategic acquisitions if it chooses. MPB's growth is confined to a smaller geographic area and is almost entirely dependent on M&A. Fulton has multiple levers for growth, while MPB essentially has one. This gives Fulton a much more resilient and predictable growth outlook. Overall Growth Outlook Winner: Fulton Financial Corporation, due to its diversified growth opportunities and strong organic growth engine.
Valuation is the only area where MPB might look attractive in comparison. As a higher-quality, more profitable, and larger bank, Fulton consistently trades at a premium valuation. Its Price-to-Tangible Book Value (P/TBV) ratio is typically in the 1.4x - 1.7x range, while MPB often trades below 1.0x. However, this premium is entirely justified. Investors pay for Fulton’s lower risk, higher profitability (ROTCE often >15%), and stable dividend. MPB's discount reflects its weaker financial metrics and higher reliance on M&A. Fulton represents quality at a fair price, while MPB represents lower quality at a cheap price. For most investors, the former is a better proposition. Which is better value today: Fulton Financial Corporation, as its premium valuation is a fair price to pay for a far superior and safer banking institution.
Winner: Fulton Financial Corporation over Mid Penn Bancorp, Inc. This is a clear victory for Fulton, which outclasses MPB on nearly every metric. Fulton's key strengths are its immense scale (~$27B vs. ~$5.1B assets), which drives superior efficiency and profitability (ROA ~1.2% vs. ~0.75%), its strong brand, and its diversified business lines. MPB’s primary weakness is its fundamental lack of scale, which prevents it from competing effectively with larger players on price, technology, or product breadth. While MPB's stock may be statistically cheaper, it is cheap for a reason. Fulton Financial is a high-quality, lower-risk, and fundamentally stronger company, making it the superior choice for nearly any investor profile.
Based on industry classification and performance score:
Mid Penn Bancorp operates a classic community banking model, building its business on local relationships primarily in Pennsylvania. The bank's main strength is its specialized and recognized expertise in SBA lending, which provides a valuable niche. However, this is offset by significant weaknesses, including a heavy reliance on interest income, a deposit base that is showing signs of pressure, and a branch network that lacks superior efficiency. The bank's competitive moat is narrow and limited to its local geography and lending specialty. For investors, the takeaway is mixed; while the bank has a defensible niche, its limited diversification and funding vulnerabilities present notable risks.
The bank is overly dependent on interest-rate sensitive income, as its fee-based revenue streams are underdeveloped and contribute a significantly smaller portion of total revenue compared to peers.
A balanced revenue mix between interest income and fee income helps to stabilize earnings through different economic cycles. Mid Penn's noninterest income accounts for only 12.9% of its total revenue, a figure that is substantially below the 20-30% range targeted by many of its regional banking peers. This heavy reliance on net interest income (87% of revenue) exposes the bank's profitability to greater volatility from interest rate movements. While the bank has fee-generating businesses like wealth management ($6.8 million) and service charges ($5.9 million), none are large enough to meaningfully offset a compression in its net interest margin. The mortgage banking business, for example, contributed only $1.1 million in 2023, highlighting the cyclicality of this revenue stream. This lack of diversification is a significant structural weakness in its business model.
The bank demonstrates a healthy and diversified deposit base with a very low reliance on volatile brokered deposits, reflecting a strong, relationship-driven funding strategy.
Mid Penn excels in the composition of its customer deposits. The bank serves a balanced mix of retail customers, small businesses, and municipalities, which creates a stable and diversified funding profile. A key strength is its minimal reliance on brokered deposits, which are funds sourced from third-party brokers seeking the highest yield and are not considered loyal. At the end of 2023, brokered deposits were just 3.6% of total deposits, a very low figure that speaks to the bank's ability to fund itself organically through its community relationships. Additionally, public funds from municipalities account for a solid 12.8% of deposits, adding another layer of stable, albeit more rate-sensitive, funding. This clean and granular deposit mix reduces concentration risk and makes the bank less vulnerable to sudden outflows during times of market stress.
Mid Penn has carved out a strong, defensible niche in SBA lending, where it is a recognized leader, providing a key point of differentiation and a source of high-quality loan growth.
While many community banks claim to serve small businesses, Mid Penn has proven expertise in a specialized segment: Small Business Administration (SBA) lending. The bank is consistently ranked as a top SBA lender in its Pennsylvania districts, which demonstrates a clear competitive advantage that is difficult for generalist banks to replicate. This niche requires specialized underwriting knowledge and efficient processes. In addition to its SBA focus, the bank maintains a solid concentration of owner-occupied commercial real estate loans, which represent 15% of its total loan portfolio. These loans are generally considered lower risk than speculative real estate loans. This disciplined focus on specialized and relationship-driven commercial lending provides the bank with a genuine moat, allowing it to attract and retain high-quality business customers.
The bank's deposit base is showing signs of weakness, with a declining share of noninterest-bearing deposits and a shift toward higher-cost time deposits, indicating a less sticky and more expensive funding profile than peers.
A bank's long-term strength is heavily dependent on a stable, low-cost deposit base. Mid Penn's metrics in this area raise concerns. Noninterest-bearing deposits, the cheapest source of funding, made up just 22% of total deposits at year-end 2023, which is below the levels of stronger regional competitors who are closer to 25-30%. Furthermore, total deposits declined by 1.6% year-over-year, and there has been a significant mix shift towards time deposits (CDs), which now represent 33% of the total. This indicates customers are moving money to chase higher yields, making the bank's funding more expensive and less stable. While its overall cost of deposits at 1.72% is in line with the industry, the underlying trends point to a deteriorating, not strengthening, deposit franchise.
The bank's physical branch network provides a solid local presence, but its operational efficiency, measured by deposits per branch, is average at best and trails key regional competitors.
Mid Penn operated 47 financial centers at the end of 2023, which form the backbone of its relationship-based service model. However, with $4.4 billion in deposits, its deposits per branch stand at approximately $93.6 million. This figure is an important measure of how effectively the bank is utilizing its physical footprint to gather low-cost funding. Compared to larger regional peers like Fulton Financial (~$110 million per branch) and F.N.B. Corp (~$100 million per branch), Mid Penn's efficiency is below average. While the bank is expanding its network through acquisitions, this metric suggests its existing branches are not as productive as those of its key competitors, limiting its operating leverage and potential profitability. A strong branch network should be a powerful asset, but in Mid Penn's case, it appears to be merely an adequate one.
Mid Penn Bancorp's recent financial statements show a mix of strengths and weaknesses. The bank delivered strong revenue and profit growth in its most recent quarter, supported by an excellent efficiency ratio of 56.6% and a robust capital position, with a tangible equity to assets ratio of 10.28%. However, potential credit quality issues are a concern, reflected in a relatively low loan loss reserve of 0.77% and a sharp increase in foreclosed assets. The investor takeaway is mixed; while recent operational performance and capital levels are positive, the underlying credit risk requires careful monitoring.
The bank maintains a strong capital base and a healthy liquidity profile, providing a solid foundation to absorb potential shocks and support growth.
Mid Penn's capital and liquidity are clear strengths. The Tangible Common Equity to Total Assets ratio was 10.28% in the most recent quarter, which is a very strong capital buffer. This is significantly above the 8% level often considered well-capitalized, indicating a robust ability to absorb unexpected losses. Specific regulatory capital ratios like CET1 were not provided, but this high tangible equity level is a very positive indicator.
On the liquidity side, the bank's loans-to-deposits ratio stood at 89.5% ($4.78 billion in loans vs. $5.34 billion in deposits). This is a healthy level, comfortably within the ideal 80-90% range, showing that the bank funds its lending primarily through stable customer deposits rather than more volatile wholesale borrowings. While data on uninsured deposits is not available, the strong capital and healthy funding mix suggest a sound financial position.
Credit quality is a notable concern due to a thin loan loss reserve and a recent spike in foreclosed properties, suggesting potential underlying stress in the loan portfolio.
The bank's readiness for credit losses appears weak. The allowance for credit losses was $37.34 million against $4.82 billion in gross loans, a ratio of just 0.77%. This is below the 1.0% to 1.25% industry average for community banks and may not be sufficient to cover potential future losses, especially if economic conditions worsen. Although the bank released -$0.43 million from its reserves in the latest quarter, this followed a significant $2.27 million provision in the prior quarter, indicating some volatility.
A more direct red flag is the sharp increase in 'Other Real Estate Owned and Foreclosed' (OREO) assets, which surged from near zero at the end of 2024 to $9.35 million. While the dollar amount is small relative to the bank's total assets of $6.27 billion, such a rapid increase is a classic indicator of rising credit problems. Without data on nonperforming loans, this OREO trend combined with the thin reserve level justifies a cautious stance.
The bank shows exceptional resilience to interest rate changes, with unrealized losses on its securities portfolio having a negligible impact on its tangible equity.
Mid Penn Bancorp appears to be managing its interest rate risk effectively. A key metric, Accumulated Other Comprehensive Income (AOCI), which reflects unrealized gains or losses on investment securities, shows a loss of only -$8.91 million. This represents just 1.38% of the bank's tangible common equity ($644.12 million). This is a significant strength, as many other banks have seen their tangible equity eroded by 10% to 25% from similar losses in a rising rate environment. This strong position gives the bank greater balance sheet flexibility and stability.
While specific data on the duration of its securities portfolio or the percentage of variable-rate loans is not provided, the very small AOCI impact suggests a well-structured balance sheet that is not overly exposed to swings in interest rates. This protects the bank's capital base from being weakened by market fluctuations in bond prices, positioning it well for a volatile rate environment.
The bank is successfully growing its core earnings from lending, with strong growth in net interest income and a healthy estimated margin.
Mid Penn's ability to profit from its core lending and investing activities appears robust. The bank's net interest income (the difference between what it earns on assets and pays on liabilities) grew by a very strong 33.5% year-over-year to $53.63 million in the latest quarter. This indicates the bank is effectively pricing its loans and managing its funding costs in the current interest rate environment.
While the Net Interest Margin (NIM) is not explicitly reported, a reasonable estimate based on its net interest income and earning assets places it around 3.4%. This is a healthy margin and is in line with or slightly above the industry average of 3.0% to 3.5%. This solid performance in its primary business of lending is a fundamental driver of the bank's overall earnings power.
The bank demonstrated excellent cost management in its most recent quarter, achieving a highly competitive efficiency ratio that supports strong profitability.
Mid Penn has shown strong discipline in managing its expenses. The bank's efficiency ratio, which measures noninterest expenses as a percentage of revenue, was 56.6% in its most recent quarter (Q3 2025). This is an excellent result, as a ratio below 60% is considered highly efficient for a community bank. This performance marks a significant improvement from 67.7% in the prior quarter and 65.3% for the full year 2024, indicating a positive trend in operational leverage.
This efficiency was achieved even as the bank grew, with noninterest expenses of $34.95 million supporting total revenues of $61.74 million. The ability to control costs while expanding revenue is critical for sustainable profitability. Strong efficiency allows more revenue to fall to the bottom line, directly benefiting shareholders and providing capital for future growth.
Mid Penn Bancorp's past performance from fiscal year 2020 to 2024 is defined by aggressive acquisition-led growth that has failed to create value for shareholders. While the bank successfully grew its loan and deposit books by over 16% annually, this expansion was funded by heavily diluting shareholders, causing shares outstanding to more than double. As a result, earnings per share (EPS) have actually declined over the five-year period, with a CAGR of -1.7%. The bank's profitability, with a volatile Return on Equity averaging below 9%, also lags competitors. The investor takeaway is decidedly mixed; the bank can grow, but its historical record shows this growth has come at the expense of its owners.
The bank has achieved impressive double-digit growth in both loans and deposits over the past five years, primarily through acquisitions, while maintaining a stable and prudent loan-to-deposit ratio.
Over the analysis period of FY2020-FY2024, Mid Penn executed its growth strategy effectively, leading to a significant expansion of its balance sheet. Gross loans grew from $2.4 billion to $4.4 billion, representing a strong compound annual growth rate (CAGR) of 16.8%. This was well-matched by growth in total deposits, which rose from $2.5 billion to $4.7 billion at a 17.3% CAGR.
This history demonstrates management's ability to identify and integrate other banks to rapidly build scale. Importantly, this growth appears to have been managed prudently. The loan-to-deposit ratio, a key measure of a bank's liquidity and funding risk, remained remarkably stable, moving from 96.3% in 2020 to a slightly more conservative 94.7% in 2024. This shows that the expanded loan book is being funded by core deposits from acquired franchises rather than riskier, less stable funding sources.
Net interest income has grown robustly along with the bank's size, but management has failed to achieve any improvement in efficiency, lagging more disciplined competitors.
A key benefit of scaling up a bank through acquisitions should be improved operational leverage and efficiency. Mid Penn has failed to deliver this. While net interest income (the bank's core profit from lending) grew at a strong 15.5% CAGR from $88.2 million to $156.7 million, its cost structure remains bloated. The efficiency ratio, which measures costs as a percentage of revenue, showed no meaningful improvement, standing at 66.5% in FY2020 and a similar 65.3% in FY2024.
This lack of progress is a significant weakness, especially when compared to more efficient competitors like S&T Bancorp, which operates with an efficiency ratio in the mid-to-high 50s. A high efficiency ratio means that a larger portion of revenue is consumed by operating costs, leaving less profit for shareholders. The bank's inability to control costs despite more than doubling in size suggests a failure to realize meaningful synergies from its many acquisitions.
Despite strong growth in overall net income, earnings per share (EPS) have been volatile and have actually declined over the past five years due to severe shareholder dilution.
This factor highlights the central failure of Mid Penn's past performance. While total net income grew from $26.2 million in FY2020 to $49.4 million in FY2024, this achievement was completely disconnected from shareholder value. On a per-share basis, the story is one of destruction. EPS started at $3.11 in 2020 and ended lower at $2.90 in 2024, for a negative 5-year CAGR of -1.7%. The path was also highly erratic, with EPS peaking at $3.44 in 2022 before collapsing to $2.29 the following year.
The clear cause of this poor performance was the massive issuance of new stock to fund acquisitions, which more than doubled the share count. The bank's average Return on Equity (ROE) of approximately 9% over the period is also subpar and lags that of higher-quality regional banking peers, which often deliver ROE in the low-to-mid teens.
The bank appears to have managed credit risk adequately through a period of rapid M&A-driven growth, with provisions for loan losses remaining at reasonable levels.
Maintaining credit discipline is critical when a bank is growing quickly through acquisitions, as it involves integrating unfamiliar loan portfolios. Mid Penn's performance here appears stable. The bank's provision for loan losses has not shown signs of runaway credit issues, moving from $4.2 million in 2020 to just $1.5 million in 2024, with a peak of $4.3 million in 2022 during a period of significant growth. This suggests that the acquired loan books did not contain major unforeseen problems.
Furthermore, the bank's allowance for loan losses has grown from -$13.4 million to -$35.5 million over the period, roughly keeping pace with the growth in the overall loan portfolio. This indicates that management has been setting aside adequate reserves to cover potential future losses as the bank has expanded. While specific data on non-performing loans is not provided, the provisioning trend suggests credit quality has been kept under control.
The dividend is stable and safely covered by earnings, but its growth has stalled, and any benefit to shareholders has been erased by massive dilution from acquisitions.
Mid Penn Bancorp has a mixed record on capital returns. On the positive side, it pays a consistent dividend that is well-covered by earnings, with a payout ratio that has remained in the conservative 23% to 35% range over the past five years. However, dividend growth has been poor. The dividend per share increased from $0.73 in 2020 to $0.80 in 2021 and has been flat ever since, resulting in a meager 4-year CAGR of just 2.3%.
The bigger issue is the bank's capital allocation for growth. To fund its acquisition strategy, the company has heavily diluted shareholders. Diluted shares outstanding surged from 8 million in FY2020 to 17 million in FY2024. Share repurchases have been minimal, with only $0.32 million spent in FY2024, doing nothing to offset the flood of new shares. This strategy has prioritized growth of the overall company over growth in per-share value for its owners.
Mid Penn Bancorp's future growth hinges almost entirely on its ability to execute its acquisition strategy, as organic growth prospects appear limited. The bank benefits from a strong niche in SBA lending, but faces significant headwinds from intense competition, rising deposit costs pressuring its net interest margin, and an underdeveloped fee income portfolio. Compared to more diversified regional peers, Mid Penn's reliance on traditional spread lending in a challenging interest rate environment is a key vulnerability. The investor takeaway is mixed; while M&A offers a path to growth, the underlying organic business faces notable profitability and expansion challenges over the next 3-5 years.
The bank has not provided specific loan growth guidance, and faces a mixed environment where its SBA lending niche is offset by headwinds in the broader commercial real estate market.
While Mid Penn possesses a strong niche in SBA lending, its overall loan growth outlook is uncertain. Management has not offered explicit loan growth guidance for the upcoming fiscal year. The broader economic environment, with higher interest rates, is likely to temper demand for new loans, particularly in the commercial real estate sector, which constitutes a significant portion of its portfolio. While its expansion into new markets via acquisition provides a tailwind, the lack of a clear pipeline or origination targets makes it difficult to forecast robust organic growth. Given the macroeconomic headwinds and absence of clear forward-looking statements from the company, a conservative outlook is warranted.
Acquisitions are the primary driver of Mid Penn's growth strategy, and the bank has a proven track record of executing and integrating deals to expand its footprint and asset base.
Given the limited organic growth in its core markets, M&A is essential for Mid Penn to achieve meaningful scale. The bank has been an active acquirer, with the recent acquisition of Brunswick Bancorp expanding its presence into the attractive New Jersey market and adding approximately $360 million in assets. The bank maintains adequate capital levels, with a CET1 ratio typically managed to support its acquisition strategy. While specific future deals are not announced, management's commentary consistently points to M&A as the key pillar of its capital deployment plan. This focus, combined with a history of successful integrations, is the most credible component of its future growth story.
The bank has not articulated a clear strategy for optimizing its physical branches or accelerating digital adoption, leaving potential efficiencies unrealized.
Mid Penn's growth strategy appears more focused on adding branches through acquisition rather than optimizing its existing footprint. The bank's deposits per branch of approximately $93.6 million trails key regional competitors, suggesting its current network is not operating at peak efficiency. Management has not provided clear targets for branch consolidation, cost savings, or growth in digital active users. Without a defined plan to improve branch productivity and shift more routine transactions to lower-cost digital channels, the bank risks carrying a higher cost structure than its peers. This lack of a clear optimization plan represents a missed opportunity to improve profitability and fund investments in other growth areas.
The bank faces significant pressure on its net interest margin due to rising deposit costs and has not provided guidance suggesting this trend will reverse soon.
The bank's net interest margin (NIM) is its primary earnings driver, and the outlook is challenging. In the most recent quarter, the bank's cost of deposits has risen sharply, reflecting the industry-wide competition for funding. Management has not provided specific forward-looking NIM guidance that indicates a significant expansion. With a substantial portion of its funding mix shifting to higher-cost time deposits (CDs), which now represent 33% of the total, the pressure on NIM is likely to persist. Without a clear path to expanding its NIM through asset repricing that outpaces funding cost increases, the bank's core profitability growth will be constrained.
The bank lacks a clear and ambitious plan to grow its fee-based income, leaving it overly exposed to interest rate fluctuations.
Mid Penn's noninterest income makes up only 12.9% of its total revenue, a figure well below the 20-30% level seen at more diversified regional banks. Management has not provided specific growth targets for its key fee-generating businesses, such as wealth management, trust services, or treasury management. For instance, wealth and trust income was $6.8 million in 2023, a relatively small contributor to a bank with over $5 billion in assets. Without a stated strategy and targets for increasing the contribution from these more stable revenue sources, the bank's earnings will remain highly dependent on its net interest margin, which is currently under pressure. This lack of focus on diversification is a significant weakness in its long-term growth outlook.
As of October 27, 2025, Mid Penn Bancorp, Inc. (MPB) appears to be fairly valued with a neutral outlook for investors. The stock, priced at $28.91, is trading in the middle of its 52-week range. Its valuation is supported by an attractive forward P/E ratio of 8.5, suggesting positive earnings expectations. However, this is balanced by a Price-to-Tangible-Book-Value (P/TBV) of approximately 1.03x, which indicates the stock is trading in line with its net asset value, offering little discount. While the 2.99% dividend yield is respectable, significant shareholder dilution over the past year detracts from the total return profile, leading to a neutral takeaway for investors.
The stock trades at a Price-to-Tangible-Book-Value ratio of approximately 1.03x, which is a reasonable valuation that is neither excessively cheap nor expensive for a bank with its current profitability.
P/TBV is a critical metric for banks, comparing the stock price to the hard, tangible assets on its balance sheet. MPB's tangible book value per share stood at $27.96 in the most recent quarter. With a price of $28.91, the P/TBV is 1.03x. This means investors are paying just a 3% premium to the bank's tangible net worth. Considering that the average P/B for regional banks is around 1.11x, MPB appears fairly priced. A P/TBV multiple around 1.0x is often considered fair value for a bank generating a return on equity (ROE) near its cost of capital. MPB's most recent ROE was 9.31%, which aligns with this fair valuation. This factor passes because the stock is not trading at a risky premium to its balance sheet value.
The bank's Price-to-Book multiple of 0.85x (and P/TBV of 1.03x) is reasonably aligned with its 9.31% return on equity, indicating no clear mispricing opportunity for investors.
A core principle of bank valuation is that higher profitability (measured by ROE or ROTCE) should warrant a higher P/B or P/TBV multiple. MPB's current ROE is 9.31%. In an environment where the 10-Year Treasury yield is around 4.0%, an equity risk premium would place a bank's cost of equity capital in the 9-11% range. Since MPB's ROE of 9.31% is right in line with its likely cost of equity, a P/TBV multiple around 1.0x is logical and expected. The stock is not generating excess returns that would justify a higher multiple, nor is it under-earning to a degree that would suggest its current multiple is too high. Because the valuation is appropriately aligned with profitability and does not signal a pricing anomaly, this factor is a "Fail" from the perspective of finding an undervalued opportunity.
The stock's forward P/E ratio of 8.5 is low, both in absolute terms and relative to its TTM P/E, signaling strong market expectations for near-term earnings growth.
MPB's TTM P/E ratio is 12.24, which is reasonable when compared to the regional bank industry average of 11.74. The more compelling metric is the forward P/E of 8.5. This sharp drop from the trailing multiple implies that analysts expect earnings per share (EPS) to grow significantly in the coming year. Based on the current price, the market is pricing in a forward EPS of approximately $3.40, a substantial increase from the TTM EPS of $2.41. This implied growth makes the stock appear inexpensive based on future earnings potential. This factor earns a "Pass" because the valuation is attractive if the company can deliver on these growth expectations.
The dividend yield is adequate and the payout ratio is safe, but significant share dilution has severely damaged the total capital return to shareholders over the past year.
MPB offers a dividend yield of 2.99%, supported by a conservative TTM payout ratio of 34.04%. This indicates the dividend is well-covered by earnings and is likely sustainable. However, capital return is more than just dividends. The number of shares outstanding has increased substantially, from 19.36 million at the end of fiscal year 2024 to 23.04 million by the third quarter of 2025. This dilution means each shareholder's ownership stake is shrinking, which is a direct negative for value. While the dividend provides income, the dilution detracts from it, leading to a "Fail" for this factor.
While MPB's forward P/E is attractive, its TTM P/E is slightly above peers and its dividend yield is below average, presenting a mixed but not compelling relative valuation picture.
When stacked against peers, MPB's valuation is not a clear standout. Its TTM P/E of 12.24 is slightly higher than the industry median of 11.74. Its P/TBV of 1.03x is slightly below the peer averages, which range from 1.11x to 1.35x, suggesting a minor discount. However, its dividend yield of 2.99% is less attractive than the 3.31% average for regional banks. Overall, MPB does not appear significantly cheaper than its competitors across key metrics. The combination of a slightly high trailing P/E and a lower-than-average dividend yield results in a "Fail" for this factor.
The most significant macroeconomic risk for Mid Penn Bancorp is its direct exposure to interest rate volatility. In a 'higher for longer' interest rate environment, the bank's funding costs will likely continue to rise as it is forced to pay more to retain customer deposits, which compresses its net interest margin (NIM)—the key driver of its profitability. An economic downturn or recession would pose a dual threat by reducing loan demand and increasing credit losses, as borrowers struggle to make payments. Given the bank's focus on commercial lending, its loan portfolio is particularly vulnerable to a slowdown in business activity and could see a rise in non-performing assets.
On an industry level, the competitive landscape is a persistent challenge. Mid Penn competes against national banking giants with massive marketing budgets and advanced digital platforms, as well as other local community banks fighting for the same customers. A growing threat comes from fintech firms and online-only banks, which are chipping away at traditional banking relationships by offering superior rates and more convenient digital services. Moreover, the regulatory environment for regional banks has become stricter following the banking failures of 2023. This increased scrutiny could lead to higher compliance costs and capital requirements, potentially limiting MPB's operational flexibility, hampering its growth-by-acquisition strategy, and reducing its ability to return capital to shareholders.
From a company-specific standpoint, Mid Penn's geographic concentration in Pennsylvania makes it highly susceptible to the economic health of that specific region. Unlike a nationally diversified bank, a local economic downturn would have an outsized negative impact on its loan book and overall performance. The composition of its loan portfolio also presents a risk, particularly its exposure to Commercial Real Estate (CRE). The CRE sector, especially office and retail properties, faces long-term structural challenges due to remote work and e-commerce trends, which could weaken collateral values and the repayment ability of borrowers in the coming years. While MPB has successfully grown through acquisitions, this strategy always carries integration risk, where merging different banking cultures and systems can prove more costly and disruptive than anticipated.
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