UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
Commission file number 001-13677
Mid Penn Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1666413
(State or other jurisdiction of (IRS Employer ID No.)
Incorporation or Organization)
349 Union Street, Millersburg, PA 17061
(Address of principal executive offices) (Zip Code)
(717) 692-2133
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the
Exchange Act)
[ ] Large accelerated Filer [X] Accelerated Filer
[ ] Non-accelerated Filer
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)
[ ] Yes [X] No
Indicate the number of shares outstanding of each of the classes of common
stock, as of the latest practical date.
3,346,860 shares of Common Stock, $1.00 par value per share, were outstanding as
of November 3, 2006.
PART I
MID PENN BANCORP, INC.
FINANCIAL INFORMATION
ITEM 1: Financial Statements:
MID PENN BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited; Dollars in thousands)
Sept. 30, Dec. 31,
2006 2005
----------- ---------
(Unaudited) (Audited)
ASSETS:
Cash and due from banks $ 7,258 $ 6,350
Interest-bearing balances 44,615 54,549
Available-for-sale securities 56,961 50,878
Federal funds sold 0 0
Loans and leases 331,992 311,837
Less,
Allowance for loan and lease losses 4,044 3,704
--------- ---------
Net loans and leases 327,948 308,133
--------- ---------
Bank premises and equip't, net 6,125 6,334
Foreclosed assets held for sale 568 458
Accrued interest receivable 2,464 2,269
Cash surrender value of life insurance 6,564 6,402
Deferred income taxes 1,385 1,392
Other assets 1,899 1,345
--------- ---------
Total Assets 455,787 438,110
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY:
Deposits:
Demand 42,431 41,719
NOW 32,010 31,686
Money Market 57,240 61,421
Savings 23,540 26,825
Time 174,008 163,623
--------- ---------
Total deposits 329,229 325,274
--------- ---------
Short-term borrowings 18,146 12,342
Accrued interest payable 2,455 1,535
Other liabilities 2,831 2,260
Long-term debt 64,745 59,838
--------- ---------
Total Liabilities 417,406 401,249
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock, par value $1 per share;
authorized 10,000,000 shares; issued
3,367,119 and 3,207,912 shares at
Sept. 30, 2006 and
December 31, 2005, resp 3,367 3,208
Additional paid-in capital 27,452 23,472
Retained earnings 7,878 10,486
Accumulated other comprehensive inc(loss) 246 231
Treasury Stock at cost
(20,173 and 19,056 shs., resp.) (562) (536)
--------- ---------
Total Stockholders' Equity 38,381 36,861
--------- ---------
Total Liabilities & Equity 455,787 438,110
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
2
MID PENN BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited; dollars in thousands)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
2006 2005 2006 2005
---------- ---------- ---------- ----------
INTEREST INCOME:
Interest & fees on loans $ 5,898 $ 4,913 $ 17,194 $ 13,993
Int.-bearing balances 566 554 1,608 1,528
Treas. & Agency securities 288 216 757 573
Municipal securities 290 264 917 793
Other securities 45 23 141 68
Fed funds sold and repos 17 12 29 38
---------- ---------- ---------- ----------
Total Int. Income 7,104 5,982 20,646 16,993
---------- ---------- ---------- ----------
INTEREST EXPENSE:
Deposits 2,280 1,722 6,296 4,637
Short-term borrowings 185 47 490 130
Long-term borrowings 825 723 2,382 2,112
---------- ---------- ---------- ----------
Total Int. Expense 3,290 2,492 9,168 6,879
---------- ---------- ---------- ----------
Net Int. Income 3,814 3,490 11,478 10,114
PROVISION FOR LOAN LOSSES 75 280 435 450
---------- ---------- ---------- ----------
Net Int. Inc. after Prov 3,739 3,210 11,043 9,664
---------- ---------- ---------- ----------
NON-INTEREST INCOME:
Trust dept 63 63 194 217
Service chgs. on deposits 340 353 1,018 1,007
Investment securities
Gains(losses), net 33 0 33 1
Income on life insurance 54 61 162 167
Income on sale of other real estate 0 0 131 56
Other 245 359 742 797
---------- ---------- ---------- ----------
Total Non-Interest Income 735 836 2,280 2,245
---------- ---------- ---------- ----------
NON-INTEREST EXPENSE:
Salaries and benefits 1,557 1,395 4,704 4,220
Occupancy, net 159 143 470 450
Equipment 200 186 617 561
PA Bank Shares tax 72 68 214 202
ATM/Debit card expenses 23 44 88 124
Professional fees 104 61 313 203
Director fees and benefits 55 77 175 203
Advertising Expense 51 79 170 242
Computer software licensing 58 49 159 149
Stationery and supplies 54 40 151 163
Early withdrawal fee on int-bearing bals 0 0 191 0
Other 452 385 1,321 1,161
---------- ---------- ---------- ----------
Tot. Non-int. Exp 2,785 2,527 8,573 7,678
---------- ---------- ---------- ----------
Income before income taxes 1,689 1,519 4,750 4,231
INCOME TAX EXPENSE 447 387 1,236 1,080
---------- ---------- ---------- ----------
NET INCOME $ 1,242 $ 1,132 $ 3,514 $ 3,151
========== ========== ========== ==========
NET INCOME PER SHARE $ 0.37 $ 0.34 $ 1.05 $ 0.94
========== ========== ========== ==========
DIVIDENDS PER SHARE $ 0.20 $ 0.20 $ 0.60 $ 0.60
========== ========== ========== ==========
Weighted Average No. of
Shares Outstanding 3,347,585 3,348,299 3,347,902 3,348,299
The accompanying notes are an integral part of these
consolidated financial statements.
3
MID PENN BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited; Dollars in thousands)
For the Nine Months
Ended Sept. 30,
2006 2005
-------- --------
Operating Activities:
Net Income $ 3,514 $ 3,151
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan losses 435 450
Depreciation 470 411
Incr. in cash-surr. value of life insurance (162) (167)
Investment securities gains, net (33) (1)
Amortization 28 27
Loss (gain) on sale/disposal of bank
premises and equipment (9) 2
Loss (gain) on the sale of foreclosed
assets (131) (56)
Deferred income taxes 7 (101)
Change in accrued interest receivable (195) (269)
Change in other assets (589) 29
Change in accrued interest payable 920 698
Change in other liabilities 571 737
-------- --------
Net cash provided by
operating activities 4,826 4,911
-------- --------
Investing Activities:
Net (incr)decr in int-bearing balances 9,934 2,074
Incr. in federal funds sold 0 0
Proceeds from sale of securities 1,923 535
Proceeds from the maturity of secs 4,112 3,587
Purchases of investment securities (12,063) (8,765)
Net increase in loans (20,434) (25,985)
Purchases of bank premises & equip't (261) (2,012)
Proceeds from sale of foreclosed assets 205 561
Proceeds from sale of bank premises & equip't 9 40
Capitalized additions - ORE 0 0
Purchase/assumption -- Vartan Nat'l accounts 0 0
-------- --------
Net cash provided by(used in)
investing activities (16,575) (29,965)
-------- --------
Financing Activities:
Net incr.(decr) in demand and savings (6,430) 10,937
Net incr.(decr) in time deposits 10,385 7,440
Net decrease in federal funds sold 0 0
Net incr.(decr) in short-term borrowings 5,804 1,012
Long-term debt repayments (5,093) (89)
Increase in long-term borrowings 10,000 10,000
Cash dividend paid (1,983) (1,914)
Purchase of treasury stock (26) 0
-------- --------
Net cash provided by(used in)
financing activities 12,657 27,386
-------- --------
Net incr(decr) in cash & due from banks 908 2,332
Cash & due from banks, beg of period 6,350 6,679
-------- --------
Cash & due from banks, end of period 7,258 9,011
======== ========
Supplemental Disclosures of Cash Flow Information:
Interest paid 8,248 6,181
Income taxes paid 1,390 1,161
Supplemental Noncash Disclosures:
Loan charge-offs, net of recoveries 95 95
Transfers to other real estate 184 74
4
Mid Penn Bancorp, Inc.
Notes to Consolidated Financial Statements
1. The consolidated interim financial statements with the exception of the
consolidated balance sheet dated December 31, 2005, are unaudited and have been
prepared according to the rules and regulations of the Securities and Exchange
Commission with respect to Form 10-Q. The financial information reflects all
adjustments (consisting only of normal recurring adjustments) which are, in our
opinion, necessary for a fair statement of results for the periods covered.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America have been condensed or omitted according to
these rules and regulations. We believe, however, that the disclosures are
adequate so that the information is not misleading. You should read these
interim financial statements along with the financial statements including the
notes included in the Corporation's most recent Form 10-K.
2. Interim statements are subject to possible adjustments in connection with the
annual audit of the Corporation's accounts for the full fiscal year. In our
opinion, all necessary adjustments have been included so that the interim
financial statements are not misleading.
3. The results of operations for the interim periods presented are not
necessarily an indicator of the results expected for the full year.
4. Management considers the allowance for loan and lease losses to be adequate
at this time.
5. Short-term borrowings as of Sept. 30, 2006, and December 31, 2005, consisted
of:
(Dollars in thousands)
9/30/06 12/31/05
------- --------
Federal funds purchased $9,800 $ 5,000
Repurchase agreements 7,574 6,899
Treasury, tax and loan note 772 443
Due to broker 0 0
------- --------
$18,146 $12,342
======= =======
Federal funds purchased represent overnight funds. Securities sold under
repurchase agreements generally mature between one day and one year. Treasury,
tax and loan notes are open-ended interest bearing notes payable to the U.S.
Treasury upon call. All tax deposits accepted by Mid Penn Bank ("MPB") are
placed in the Treasury note option account. The due to broker balance represents
previous day balances transferred from deposit accounts under a sweep account
agreement.
5
6. During the first quarter of 2006, MPB entered into a $5 million, five-year,
long-term borrowing with the FHLB at a fixed rate of 5.13% and a $5 million,
three-year, long-term borrowing with the FHLB at a fixed rate of 5.18%. There
were no additional borrowings made during the second or third quarters.
7. MPB has a noncontributory defined benefit pension plan for directors. The
plan provides defined benefits based on years of service. MPB also has other
postretirement benefit plans covering full-time employees. These health care and
life insurance plans are noncontributory. MPB uses a December 31 measurement
date for its plans.
The components of net periodic pension/benefit costs from these plans are as
follows:
Components of Net Periodic Benefit Cost
Nine months ended September 30:
(Dollars in thousands) Pension Benefits Other Benefits
2006 2005 2006 2005
---- ---- ---- ----
Service cost $ 30 $ 21 $ 15 $ 33
Interest cost $ 21 $ 30 $ 27 $ 27
Expected return on plan assets $ -- $ -- $ -- $ --
Amortization of transition obligation $ 12 $ -- $ -- $ 12
Amortization of prior service cost $ -- $ 21 $ -- $ --
Amortization of net (gain) loss $ (3) $ -- $ -- $ --
---- ---- ---- ----
Net periodic pension/benefit cost $ 60 $ 72 $ 42 $ 72
---- ---- ---- ----
8. Earnings per share is computed by dividing net income by the weighted average
number of common shares outstanding during each of the periods presented, giving
retroactive effect to stock dividends. The Corporation's basic and diluted
earnings per share are the same since there are no dilutive shares of securities
outstanding.
9. The purpose of reporting comprehensive income (loss) is to report a measure
of all changes in the Corporation's equity resulting from economic events other
than transactions with stockholders in their capacity as stockholders. For the
Corporation, "comprehensive
6
income (loss)" includes traditional income statement amounts as well as
unrealized gains and losses on certain investments in debt and equity securities
(i.e. available- for-sale securities). Because unrealized gains and losses are
part of comprehensive income (loss), comprehensive income (loss) may vary
substantially between reporting periods due to fluctuations in the market prices
of securities held.
(Dollars in thousands)
Three Months Nine Months
Ended Sept. 30: Ended Sept. 30:
2006 2005 2006 2005
------- ------- ------- -------
Net Income $ 1,242 $ 1,132 $ 3,514 $ 3,151
------- ------- ------- -------
Other comprehensive income(loss):
Unrealized holding gains (losses)
on securities arising during the
period 690 (134) 56 (265)
Less: reclassification
adjs for losses(gains) included
in net income (33) 0 (33) (1)
------- ------- ------- -------
Other comprehensive income(loss)
before income tax (provision)
benefit 657 (134) 23 (266)
Income tax (provision) benefit
related to other comp.income (loss) (223) 34 (8) 67
------- ------- ------- -------
Other comprehensive inc(loss) 434 (100) 15 (199)
------- ------- ------- -------
Comprehensive Income 1,676 1,032 3,529 2,952
======= ======= ======= =======
10. On July 31, 2006, MPB entered into a Purchase and Assumption Agreement with
Omega Bank ("Omega") pursuant to which the Bank will purchase the assets and
assume the liabilities related to the Steelton and Middletown branches of Omega.
Consummation of the transaction is subject to certain customary terms and
conditions, including but not limited to receipt of various regulatory
approvals. The transaction is expected to close during the fourth quarter of
2006.
7
Mid Penn Bancorp, Inc.
Millersburg, Pennsylvania
ITEM 2: Management's Discussion of Consolidated Financial Condition
Management's Discussion of Consolidated Financial Condition as of September 30,
2006, compared to year-end 2005 and the Results of Operations for the third
quarter and the first nine months of 2006 compared to the same periods in 2005.
CONSOLIDATED FINANCIAL CONDITION
Total assets as of Sept. 30, 2006, were $455,787,000, compared to $438,110,000
as of December 31, 2005. Asset growth has been led by growth in the MPB's loan
portfolio.
During the first nine months of 2006, net loans outstanding
increased by $19,815,000 from year end. The majority of this 6.4% increase was
due to strong demand for commercial real estate loans, particularly in the
Capital Region (Harrisburg Area), as well as the addition of two seasoned loan
officers during the year.
Total deposits increased by $3,955,000 during the first
nine months of 2006. This growth came primarily from the issuance of $10 million
in brokered certificates of deposit with a weighted-average maturity of 4.3
years. MPB experienced a run-off of special-rate MMDA balances that were
attracted in 2005 in association with the opening of the Allentown Boulevard
Office in Harrisburg.
Maturing interest-bearing balances were invested in both higher yielding loans
and available-for-sale securities, as rising rates offered opportunities in the
investment arena. Net long-term borrowings increased by approximately $5 million
in an effort to lock in low interest rates. All components of long-term debt are
advances from the FHLB.
As of September 30, 2006, MPB's capital ratios are well in excess of the minimum
and well-capitalized guidelines, and the Corporation's capital ratios are in
excess of the Bank's capital ratios. The changes in Mid Penn Bancorp's
additional paid in capital account resulted from the 5% stock dividend paid to
shareholders in February of 2006. In September of 2005, Mid Penn Bancorp's Board
of Directors approved a Stock Repurchase Program under which the Corporation
could buy back up to 250,000 shares of Mid Penn Bancorp common stock. Through
September 30, 2006, 1,117 shares have been repurchased at an average price of
$23.61 per share.
MPB has entered into a Purchase and Assumption agreement with Omega to purchase
the assets and assume the liabilities related to the Steelton and Middletown
branches of Omega. Assets and liabilities totaled approximately $30 million at
the time of agreement. The transaction is expected to close during the fourth
quarter of 2006. The Corporation has adequate capital to absorb these additional
branches.
8
RESULTS OF OPERATIONS
Net income for the first nine months of 2006 was $3,514,000, compared with
$3,151,000 earned in the same period of 2005. Net income per share for the same
period of 2006 and 2005 was $1.05 and $.94, respectively. Net income as a
percentage of average stockholders' equity, also known as return on equity,
(ROE), was 12.5% on an annualized basis for the nine months ended September 30
and 11.8% for the same period of 2005.
Net income for the third quarter of 2006 was $1,242,000, compared with
$1,132,000 earned in the same quarter of 2005. Net income per share for the
third quarter of 2006 and 2005 was $.37 and $.34, respectively. Net income was
aided by a larger base of earning assets in 2006.
Net interest income of $3,814,000 for the quarter ended
September 30, 2006, continues to show strength, increasing by more than 9%
compared to the $3,490,000 earned in the same quarter of 2005. The increase in
short-term interest rates through mid-year, coupled with significant asset
growth, resulted in the substantial increase in net interest income.
During the third quarter of 2006, MPB analyzed interest rate risk using the
Profitstar Asset-Liability Management Model. Using the computerized model,
Management reviews interest rate risk on a periodic basis. This analysis
includes an earnings scenario whereby interest rates are increased by 200 basis
points (2 percentage points) and another whereby they are decreased by 200 basis
points. At September 30, 2006, these scenarios were within the policy limits of
+/- 15% in net interest income for the next twelve months; however, actual
results could vary significantly from the calculations prepared by management.
Based on Management's analysis of the loan portfolio, MPB recorded a $75,000
provision for possible loan and lease losses during the third quarter of 2006,
compared to a provision of $280,000 made during the third quarter of 2005. The
smaller provision in the third quarter of 2006 reflects both a decrease in
non-performing loans as well as a decrease in loan demand during the quarter,
compared to the same period of 2005. On a quarterly basis, senior management
reviews potentially unsound loans taking into consideration judgments regarding
risk of loss, economic conditions, trends and other factors in determining a
reasonable provision for the period. A portion of the allowance for loan and
lease losses is based on applying historical loss ratios to the existing loan
portfolio.
Non-interest income amounted to $735,000 for the third quarter of 2006 compared
to $836,000 earned during the same quarter of 2005. Service charges on deposits
amounted to $340,000, a decline of 3.7%, during the third quarter of 2006 as MPB
continues to focus on fee and service charge income. One significant contributor
to non-interest income is insufficient fund (NSF) fee income. NSF fee income
contributed approximately $274,000 of income during the third quarter of 2006
and $294,000 during the same quarter of 2005.
Non-interest expense increased by $258,000, or 10.2%, during the third quarter
of 2006 compared to the same quarter of 2005. The majority of this increase was
$162,000 in additional personnel expense as MPB continues to grow its talent
pool. Professional fees, which include recruiting fees, increased accordingly by
$43,000. We also paid approximately $191,000 in early withdrawal penalties on a
block of five-year interest bearing balances redeemed during the first two
quarters of 2006. The proceeds from these jumbo certificates of deposit were
reinvested at current rates to increase the Bank's interest income going
forward. The increased cash flow will more than offset the penalties paid over
the remaining lives of the balances.
9
LIQUIDITY
MPB's objective is to maintain adequate liquidity 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 include interest-bearing balances, maturing investment securities,
borrowings, payments received on loans, and increases in deposit liabilities.
Funds generated from operations were a significant source of funds for the first
nine months of 2006. Another significant source of funds came from the maturity
and early redemption of interest bearing balances that were liquidated during
the first half of 2006, which generated over $9.9 million in funds. During the
second quarter, MPB issued $10 million of brokered certificates of deposit with
a weighted-average maturity of 4.3 years and a cost of funds of 5.05%. Another
source of funds during that quarter was $10 million of long-term borrowings
entered into with the FHLB, $5 million of which replaced a borrowing that
matured during that quarter. These fixed-rate borrowings and brokered
certificates were consummated in anticipation of higher rates later in the year.
The major use of funds during the first nine months of 2006 was the net increase
in loans of $20.4 million, particularly in the area of commercial loans secured
by real estate. Another major use of cash during the period was the purchase of
$12 million available-for-sale securities due to rising rates offering more
attractive investment opportunities.
CREDIT RISK AND ALLOWANCE FOR LOAN AND LEASE LOSSES
Total non-performing assets have decreased to $3,176,000 representing 0.70% of
total assets at Sept. 30, 2006, from $3,317,000 or 0.76% of total assets at
December 31, 2005. Most non-performing assets are supported by collateral value
that appears to be adequate at Sept. 30, 2006.
The allowance for loan and lease losses at Sept. 30, 2006, was $4,044,000 or
1.22% of loans, net of unearned interest, as compared to $3,704,000 or 1.19% of
loans, net of unearned interest, at December 31, 2005.
Based upon the ongoing analysis of MPB's loan portfolio by the loan review
department, the latest quarterly analysis of potentially unsound loans and
non-performing assets, Management considers the Allowance for Loan and Lease
Losses to be adequate to absorb any reasonable, foreseeable loan and lease
losses.
NEW ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board recently issued FASB Interpretation No.
48, "Accounting for Uncertainty in Income Taxes." This pronouncement will be
effective for MPB in 2007. The effects of this pronouncement are not
determinable at this time.
In September 2006, The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 158, "Employers' Accounting for Defined
Benefit Pension and Other Postretirement Plans." This standard requires, among
other things, that an employer measure the funded status of a benefit plan in
its balance sheet along with related disclosures. This pronouncement will be
effective for MPB for the year ending December 31, 2006. The effects of this
pronouncement are not determinable at this time.
10
MID PENN BANCORP, INC.
Sept. 30, Dec. 31,
2006 2005
--------- --------
Non-Performing Assets:
Non-accrual loans 1,747 1,773
Past due 90 days or more 861 1,086
Restructured loans 0 0
----- -----
Total non-performing loans 2,608 2,859
Other real estate 568 458
----- -----
Total 3,176 3,317
===== =====
Percentage of total loans outstanding 0.96% 1.06%
Percentage of total assets 0.70% 0.76%
Analysis of the Allowance for
Loan and Lease Losses:
Balance beginning of period 3,704 3,643
Loans charged off:
Commercial real estate, construction
and land development 0 32
Commercial, industrial and agricultural 66 29
Real estate - residential mortgage 0 0
Consumer 84 138
----- -----
Total loans charged off 150 199
----- -----
Recoveries of loans previously charged off:
Commercial real estate, construction
and land development 0 0
Commercial, industrial and agricultural 3 12
Real estate - residential mortgage 0 0
Consumer 52 23
----- -----
Total recoveries 55 35
----- -----
Net (charge-offs) recoveries (95) (164)
----- -----
Current period provision for
loan losses 435 225
----- -----
Balance end of period 4,044 3,704
===== =====
11
Item 3: Quantitative and Qualitative Disclosure about Market Risk
In the normal course of conducting business activities, the Company is exposed
to market risk, principally interest risk. Interest risk arises from market
driven fluctuations in interest rates that affect cash flows, income, expense
and values of financial instruments. The Asset/Liability Committee, using
policies and procedures approved by the Board of Directors, is responsible for
managing the rate sensitivity position.
No material changes in the market risk strategy occurred during the current
period. No material changes have been noted in the Company's equity value at
risk. A detailed discussion of market risk is provided in the Form 10-K for the
year ended December 31, 2005.
Item 4: Controls and Procedures:
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, Mid Penn Bancorp updated its
evaluation, under the supervision and with the participation of the Mid Penn
Bancorp's management, including the Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the corporation's
disclosure controls and procedures pursuant to the Securities Exchange Act of
1934 ("Exchange Act") Rule 13a-15e. Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that Mid Penn Bancorp's
disclosure controls and procedures are effective in timely alerting them to
material information relating to Mid Penn Bancorp (including its consolidated
subsidiaries) required to be included in our periodic SEC filings.
Changes in Internal Controls Over Financial Reporting
There was no change in Mid Penn Bancorp's internal controls or, to its
knowledge, in other factors that have materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial
reporting.
12
Mid Penn Bancorp, Inc.
PART II - OTHER INFORMATION:
Item 1. Legal Proceedings - Management is not aware of any litigation that would
have a material adverse effect on the consolidated financial position of Mid
Penn Bancorp. There are no proceedings pending other than ordinary routine
litigation incident to the business of Mid Penn Bancorp and of Mid Penn Bank. In
addition, management does not know of any material proceedings contemplated by
governmental authorities against Mid Penn Bancorp or Mid Penn Bank or any of its
properties.
Item 1A. Risk Factors - There are no material changes from the risk factors as
previously disclosed in the Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds - In
September of 2005, Mid Penn Bancorp's Board of Directors approved a Stock
Repurchase Program under which the Corporation could buy back up to 250,000
shares of Mid Penn Bancorp common stock. Through September 30, 2006, 1,117
shares have been repurchased at an average price of $23.61 per share.
Item 3. Defaults Upon Senior Securities - Nothing to report
Item 4. Submission of Matters to a Vote of Security Holders - Nothing to Report
Item 5. Other Information - Nothing to report
13
Item 6. Exhibits -
3(i) The Registrant's Articles of Incorporation. (Incorporated by reference
to Registrant's Annual Report on Form 10-K filed with the SEC on March
29, 2002.)
3(ii) The Registrant's By-laws. (Incorporated by reference to Registrant's
Annual Report on Form 10-K filed with the SEC on March 29, 2002.)
10.1 Mid Penn Bank's Profit Sharing Retirement Plan. (Incorporated by
reference to Registrant's Annual Report on Form 10-K filed with the SEC
on March 29, 2002.)
10.2 Mid Penn Bank's Employee Stock Ownership Plan. (Incorporated by
reference to Registrant's Annual Report on Form 10-K filed with the SEC
on March 29, 2002.)
10.3 The Registrant's Dividend Reinvestment Plan, as amended and restated.
(Incorporated by reference to Registrant's Registration Statement on
Form S-3, filed with the SEC on October 12, 2005.)
10.4 Salary Continuation Agreement between Mid Penn Bank and Alan W. Dakey.
(Incorporated by reference to Registrant's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 28, 2003.)
10.5 Split Dollar Agreement between Mid Penn Bank and Eugene F. Shaffer
(Incorporated by reference to Registrant's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on March 14, 2005)
10.6 Death Benefit Plan and Agreement between Mid Penn Bank and the Trustee
of the Eugene F. Shaffer Irrevocable Trust (Incorporated by reference to
Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 14, 2005)
10.7 Purchase and Assumption Agreement by and between Mid Penn Bank and Omega
Bank dated as of July 31, 2006.
11.0 Statement regarding the computation of Per Share Earnings (Included in
body of 10-Q)
31.1 Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
31.2 Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
32.1 Chief Executive Officer'sss.1350 Certification.
32.2 Chief Financial Officer's ss.1350 Certification
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mid Penn Bancorp, Inc.
Registrant
/s/ Alan W. Dakey /s/ Kevin W. Laudenslager
By: Alan W. Dakey By: Kevin W. Laudenslager
President & CEO Treasurer
Date: Nov. 3, 2006 Date: Nov. 3, 2006
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