Exhibit 99.1

PRESS RELEASE

Mid Penn Bancorp, Inc.

349 Union Street

Millersburg, PA  17061

1-866-642-7736

CONTACTS

MID PENN BANCORP, INC. REPORTS FIRST QUARTER 2020 EARNINGS

AND DECLARES A QUARTERLY DIVIDEND

April 27, 2020 – Millersburg, PA – Mid Penn Bancorp, Inc. (“Mid Penn”) (NASDAQ: MPB), the parent company of Mid Penn Bank (the “Bank”), today reported net income to common shareholders (earnings) for the quarter ended March 31, 2020 of $3,818,000 or $0.45 per common share basic and diluted, compared to earnings of $4,077,000 or $0.48 per common share basic and diluted for the quarter ended March 31, 2019.  Mid Penn also reported that, based upon its first quarter results for 2020, the Board of Directors, at a meeting held on April 22, 2020, declared a regular quarterly dividend per common share of $0.18 payable on May 25, 2020, to shareholders of record as of May 11, 2020.  

Tangible book value per common share, a non-GAAP measure that is regularly reported in the banking industry and the most directly comparable non-GAAP measure to book value per share, favorably increased to $20.18 as of March 31, 2020, compared to $19.96 at December 31, 2019, and $18.64 as of March 31, 2019.  Mid Penn’s GAAP book value per share was $28.23 at March 31, 2020, compared to $28.05 at December 31, 2019 and $26.88 as of March 31, 2019.  Please refer to the section included herein under the heading “Reconciliation of Non-GAAP Measures (Unaudited)” for a discussion of our use of non-GAAP adjusted financial information, which includes tables reconciling GAAP and non-GAAP adjusted financial measures for the quarters ended March 31, 2020 and 2019 and certain other periods.    

Mid Penn also reported continued growth in total assets to $2,299,751,000 as of March 31, 2020, reflecting an increase of $68,576,000 or 3 percent compared to total assets of $2,231,175,000 as of December 31, 2019, and an increase of $151,934,000 or 7 percent compared to total assets of $2,147,817,000 as of March 31, 2019.  Asset growth during the quarter ended March 31, 2020 included an increase of $21,897,000 in investment securities, and an increase in total loans outstanding of $35,393,000 since year-end, representing an 8 percent annualized loan growth rate.  The asset growth was funded by $60,887,000 of deposit growth, representing an annualized deposit growth rate of 13 percent, with more than half of such growth favorably being in noninterest-bearing deposits.

PRESIDENT’S STATEMENT

As reflected in the accompanying information for the first quarter of 2020, Mid Penn’s financial condition and performance continue to reflect soundness, qualitative growth, consistent profitability, increasing tangible book value, and a sustained quarterly dividend.  

But versus looking back on our successes, we like our communities, nation, and world are focused forward on effectively dealing with the impact of the coronavirus (COVID-19) pandemic.  Since the very beginning of this COVID-19 outbreak, the Mid Penn board of directors has challenged our team to be aggressive in how we protect our employees, customers and communities, but to also ensure that we do all we can to provide the critical financial support and resources so many reliably need in this critical time. I would like to share some of the key steps we have taken to provide our full range of essential services while helping to keep all parties safe:

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Through the first round of funding under the federal Paycheck Protection Program (PPP) as established under the CARES Act, our expert team of commercial lenders and business development personnel have already disbursed over $467 million of those funds to over 2,100 businesses and we continue to process already approved applications.  This level of involvement in the first phase of the PPP placed us third in the nation as far as total PPP loans disbursed as a percentage of a bank’s total loans. These loans will provide continuing payroll support for over 50,000 employees of these borrowers and the communities we serve.  As Congress has authorized a second round of PPP, we are again actively involved in receiving and processing new applications to provide funding to help even more businesses.

We are so grateful for the tireless efforts of our healthcare workers, first responders, parents and caregivers, and so many who are making incredible sacrifices to ensure that we take care of each other day by day, knowing that we will win the battle against COVID-19.  Be assured that as we manage through the numerous challenges we at Mid Penn face in these unprecedented times, we are focused on doing all we can to support the personal and financial safety of our customers, employees, and communities we serve.

OPERATING RESULTS

Net Interest Income and Net Interest Margin

For the three months ended March 31, 2020, net interest income was $17,665,000, an increase of $359,000 or 2 percent compared to net interest income of $17,306,000 for the three months ended March 31, 2019.  Mid Penn’s tax-equivalent net interest margin was 3.45% for the first quarter of 2020 compared to 3.70% for the first quarter of 2019. Though the quarterly average balance of interest-earning assets increased year over year, the yields on interest earning assets declined consistent with reductions in the yield curve during the first quarter of 2020, including the impact of the two rate decreases approved by the  Federal Open Market Committee (“FOMC”), for 1.50% combined, during March 2020 in response to the COVID-19 pandemic.  The total cost of deposits for the first quarter of 2020 favorably decreased compared to the first quarter of 2019 as a result of the same yield curve reductions and FOMC rate cuts.

Noninterest Income

During the three months ended March 31, 2020, noninterest income totaled $2,934,000, an increase of $885,000 or 43 percent, compared to noninterest income of $2,049,000 for the three months ended March 31, 2019.

Mortgage banking income was $1,182,000 for the three months ended March 31, 2020, an increase of $745,000 or 170 percent compared to mortgage banking income of $437,000 for the three months ended March 31, 2019.  Longer-term mortgage interest rates have declined significantly over the past twelve months, resulting in a higher level of mortgage originations (both purchase and refinance activity) and secondary-market loan sales when comparing the first quarter of 2020 to the same period in 2019. Additionally, the first three months of 2020 reflected a full quarter of production and loan sales from Mid Penn’s Southeastern Pennsylvania mortgage origination team, while the same group was not fully operational for the entire first quarter of 2019.

ATM debit card interchange income was $416,000 for the three months ended March 31, 2020, an increase of $82,000 or 25 percent compared to interchange income of $334,000 for the three months ended March 31, 2019. The increase resulted from increasing card-based transaction usage across our expanding transactional account customer base.

Net gains on sales of securities were $132,000 for the three months ended March 31, 2020, an increase of $125,000 compared to net gains on sales of securities of $7,000 for the three months ended March 31, 2019.  Sale volume and gains were driven by the implementation of asset/liability management strategies, which vary from quarter to quarter based upon market conditions and related yield curve and valuation changes.

Net gains on sales of SBA loans were $84,000 for the three months ended March 31, 2020, a decrease of $118,000 or 58 percent compared to net gains on sales of SBA loans of $202,000 during the same quarter of 2019.  None of the SBA loan production or sales activity in the first quarter of 2020 related to the PPP loans under the CARES Act, as the PPP loans did not begin to be disbursed by Mid Penn until April 2020.

Other income was $372,000 for the three months ended March 31, 2020, an increase of $42,000 compared to other income of $330,000 for the three months ended March 31, 2019.  The increase in other income was primarily driven by higher volumes of fee-based income, including wire transfer fees, letter of credit fees, and credit card program referrals and royalties.

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Noninterest Expense

For the three months ended March 31, 2020, noninterest expense totaled $15,581,000, an increase of $1,278,000 or 9 percent, compared to noninterest expense of $14,303,000 for the three months ended March 31, 2019.  The year-over-year increase in quarterly noninterest expense was attributable to both (i) growth-related business development and retail staff additions since March 31, 2019, and (ii) increases across other expense categories reflective of the overall growth of the organization, including software licensing and utilization, Pennsylvania bank shares tax, and occupancy and equipment expenses.  Also, other expenses for the first quarter of 2020 included approximately $63,000 of non-recurring FHLB prepayment costs resulting from Mid Penn’s early redemption of $9,500,000 of higher-cost term advances.  No FHLB borrowing prepayments occurred during the first quarter of 2019.

Salaries and employee benefits were $8,281,000 for the three months ended March 31, 2020, an increase of $522,000 or 7 percent, versus the same period in 2019, with the increase primarily attributable to (i) retail staff added as part of the new Hazle Township branch location opened during the fourth quarter of 2019, (ii) the addition of private banking business development professionals to enhance our wealth management activities, and (iii) increases in medical expenses and other employee benefits costs when compared to the same period of 2019.

Equipment expense increased $86,000 or 14 percent during the three months ended March 31, 2020 compared to the same period in 2019, related to the expansion of the corporate administrative facilities and further centralization of back-office functions to enhance operations and efficiencies across the Mid Penn footprint.

Pennsylvania bank shares tax expense was $405,000 for the three months ended March 31, 2020, an increase of $269,000 or 198 percent compared to $136,000 for the three months ended March 31, 2019.  The first quarter of 2019 reflected the application of $122,500 of shares tax credits that were earned based upon the timing of certain carryover donations made that quarter that had been committed by First Priority Bank (which Mid Penn acquired in 2018).  Similar donations and credits did not occur in the first quarter 2020. The increase in shares tax expense also reflects the organic growth in the past year of the total shareholder equity balance upon which the tax is based.

Software licensing and utilization costs were $1,221,000 for the three months ended March 31, 2020, an increase of $200,000 or 20 percent compared to $1,021,000 for the three months ended March 31, 2019.  This increase reflects the additional costs from both transaction volume based charges, and licensing fees related to the addition of new staff and locations added since the first quarter of 2019.  Additionally, Mid Penn continued to invest in upgrades to internal systems, networks, storage capabilities, and data security mechanisms to enhance data management and security capabilities responsive to both the larger company profile and increasing complexity of information technology management.

FDIC assessment expense was $312,000 for the three months ended March 31, 2020, a decrease of $47,000 or 13 percent compared to $359,000 for the three months ended March 31, 2019 due to the Bank having a favorably lower FDIC Assessment rate during the first quarter of 2020.

Legal and professional fees for the three months ended March 31, 2020 decreased by $70,000 or 17 percent compared to the same period in 2019, due primarily to the first quarter of 2019 including additional services supporting a new third-party loan review service, as well costs associated with supporting both trust and wealth management activities, and the update and revision of Mid Penn’s corporate governance and Board structure.

Intangible amortization decreased from $363,000 during the three months ended March 31, 2019 to $323,000 during the three months ended March 31, 2020, as the core deposit intangible (“CDI”) amortization from the 2018 acquisitions of both (i) the Scottdale Bank and Trust on January 8, 2018, and (ii) First Priority Bancorp on July 31, 2018 continues to decrease as it is amortized using the sum-of-the-years digits method over a ten year term (which results in decreasing expense recognized in each year following the respective acquisition).

The provision for income taxes was $650,000 during the three months ended March 31, 2020, a decrease of $200,000 or 24 percent compared to $850,000 for the same period in 2019.  The provision for income taxes for the three months ended March 31, 2020 reflects an effective federal tax rate of 14.5%, compared to an effective federal tax rate of 17.3% for the three months ended March 31, 2019.  The reduction in the effective federal tax rate for 2020 reflects tax credits recognized related to Mid Penn’s investment in a low-income housing project in Dauphin County, Pennsylvania.  The units were substantially completed and met the occupancy requirements necessary to begin recognizing the related amortization and tax credits during the fourth quarter of 2019.  Similar credits were not recognized during the three months ended March 31, 2019.

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FINANCIAL CONDITION

Loans

Total loans at March 31, 2020 were $1,798,149,000 compared to $1,762,756,000 at December 31, 2019, an increase of $35,393,000 or 2.0 percent since year-end 2019 (annualized growth rate of 8 percent).  The increase in total loans was primarily comprised of growth in both commercial real estate credits, and commercial and industrial financing loans.

Investments

Mid Penn’s portfolio of held-to-maturity securities, recorded at amortized cost, increased $31,486,000 to $167,963,000 as of March 31, 2020, as compared to $136,477,000 as of December 31, 2019.  Mid Penn’s total available-for-sale securities portfolio decreased $9,589,000 or 26 percent, from $37,009,000 at December 31, 2019 to $27,420,000 at March 31, 2020.  The first quarter of 2020 reflected a higher volume of calls of both available-for-sale and held-to-maturity securities as market rates dropped due both changes in the yield curve and from the FOMC reducing rates in response to the COVID-19 pandemic, leading to security issuers to execute calls on some higher coupon securities.  Additionally, Mid Penn initiated some sales of available-for-sale investment securities for both portfolio and asset liability management.  Growth within the held-to-maturity portfolio was a result of purchases made in anticipation of near-term future calls of investment securities.

Deposits

Total deposits increased $60,887,000 or 3.2 percent, from $1,912,394,000 at December 31, 2019, to $1,973,281,000 at March 31, 2020 (annualized growth rate of over 12 percent).  Deposit growth was led by substantial increases in noninterest-bearing balances and money market deposits, primarily due to both new and expanded cash management and commercial deposit account relationships.

Long-Term Debt

Long-term debt decreased $9,539,000 or 29 percent, from $32,903,000 at December 31, 2019 to $23,364,000 at March 31, 2020.  During the first quarter of 2020, Mid Penn prepaid $9,500,000 of long-term Federal Home Loan Bank (“FHLB”) borrowings as these borrowings had rates above both the incremental cost of deposits and overnight federal funds rate yields.  Mid Penn recognized $63,000 of FHLB prepayment penalties, which were recorded within other noninterest expenses on the Consolidated Statements of Income.  

Subordinated Debt

Subordinated debt increased $14,989,000 or 55 percent, from $27,070,000 at December 31, 2019 to $42,059,000 at March 31, 2020.  As previously reported on a Form 8-K dated March 20, 2020, Mid Penn entered into agreements for an aggregate of $15,000,000 of its Subordinated Notes due 2030 (the “Notes”) to accredited investors.  The Notes will bear interest at a rate of 4.0% per year for the first five years and then float at the Wall Street Journal’s Prime Rate, and are intended to be treated as Tier 2 capital for regulatory capital purposes.

Capital

Shareholders’ equity increased by $1,637,000 or less than 1 percent from $237,874,000 as of December 31, 2019 to $239,511,000 as of March 31, 2020. The increase in shareholders’ equity reflects the growth in retained earnings through year-to-date net income, net of dividends paid.  Regulatory capital ratios for both Mid Penn and its banking subsidiary exceeded regulatory “well-capitalized” levels at both March 31, 2020 and December 31, 2019.

ASSET QUALITY

The allowance for loan and lease losses as a percentage of total loans was 0.56% at March 31, 2020 compared to 0.54% at December 31, 2019 and 0.52% at March 31, 2019.  Mid Penn had net loan charge-offs of $51,000 and $20,000 for the three months ended March 31, 2020 and 2019, respectively.  Loan loss reserves as a percentage of nonperforming loans were 90% at March 31, 2020, compared to 79% at December 31, 2019, and 119% at March 31, 2019.  

The provision for loan losses was $550,000 for the first quarter of 2020, an increase of over 340 percent compared to a provision for loan losses of $125,000 for the first quarter of 2019.  The allowance for loan losses and the related provision reflect Mid Penn’s continued application of the incurred loss method for estimating credit losses as Mid Penn has not yet adopted the current expected credit loss (“CECL”) accounting standard.  The increase in the loan loss reserves and the quarterly provision was primarily the result of an increase in the allowance balance related to general allocations, driven by increases in specific qualitative factors, particularly in the commercial real estate pool, when compared to prior periods.  

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Total nonperforming assets were $12,872,000 at March 31, 2020, an increase compared to nonperforming assets of $12,157,000 at December 31, 2019, and $7,517,000 at March 31, 2019. Nonperforming assets were 0.72% of the total of loans plus other real estate assets as of March 31, 2020, compared to 0.69% as of December 31, 2019, and 0.46% as of March 31, 2019.  The increase in foreclosed real estate from $196,000 at December 31, 2019 to $1,718,000 at March 31, 2020 was driven by the transfer of one loan relationship from nonaccrual status to foreclosed real estate during the first quarter of 2020.  

Asset quality measures did not reflect any new impaired assets or specific reserve allocations related to the early impact of the COVID-19 pandemic, though Bank management is continuously and closely monitoring and evaluating the impact of the COVID-19 situation on the portfolio as discussed in the COVID-19 Considerations and Subsequent Events section below.   Management believes, based on information currently available, that the allowance for loan and lease losses of $10,014,000 is adequate as of March 31, 2020, to cover probable and estimated loan losses in the portfolio.

COVID-19 CONSIDERATIONS AND SUBSEQUENT EVENTS

In response to the COVID-19 global pandemic event which has impacted the United States including the State of Pennsylvania and Mid Penn’s market area and communities and customers during the first quarter of 2020 and continuing through the period subsequent to March 31, 2020, Mid Penn management performed several updated evaluations subsequent to March 31, 2020 and through the date of this release to determine whether the current or expected impact from this COVID-19 event resulted in any impairment to Mid Penn’s business and the recorded value of certain assets:

In addition to the specific banking service changes and measures as discussed in the President’s Statement in how we protect our employees, customers and communities during this COVID-19 pandemic, we have also made significant lending program efforts to provide critical support to our borrowers and other small businesses in our markets:

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Prior to this interagency guidance being issued, Mid Penn had proactively reached out to its borrowers to assess how the COVID-19 situation was impacting them, and was evaluating taking similar forbearance and payment deferral measures.  In response to these customer outreaches and respectful of the interagency guidance, through April 24, 2020, Mid Penn has provided loan modifications to 921 borrowers with aggregate loans outstanding of $409,735,000.  Depending upon the specific needs and circumstances affecting each borrower, the majority of these modifications range from deferrals of both principal and interest payments for three to six months, or borrowers reverting to interest-only payments for a period of three to six months.  Mid Penn remains in communication with each of these borrowers to assess the ongoing credit status of the borrowers, and may make further adjustments to a borrower’s modification at some future time if warranted for the specific situation.

FINANCIAL HIGHLIGHTS (Unaudited):

* Non-GAAP measure; see Reconciliation of Non-GAAP Measures

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OPERATING HIGHLIGHTS (Unaudited):

RECONCILIATION OF NON-GAAP MEASURES (Unaudited:)

This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). For tangible book value, the most directly comparable financial measure calculated in accordance with GAAP is book value.  We believe that this measure is important to many investors in the marketplace who are interested in changes from period to period in book value per common share exclusive of changes in intangible assets.  Goodwill and other intangible assets have the effect of increasing total book value while not increasing tangible book value.   Income tax effects of non-GAAP adjustments are calculated using the applicable statutory tax rate for the jurisdictions in which the charges (benefits) are incurred, while taking into consideration any valuation allowances or non-deductible portions of the non-GAAP adjustments. This non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of Mid Penn’s results and financial condition as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Management believes that this non-GAAP supplemental information will be helpful in understanding Mid Penn’s ongoing operating results. This supplemental presentation should not be construed as an inference that Mid Penn’s future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

Tangible Book Value Per Share

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CONSOLIDATED BALANCE SHEETS (Unaudited):

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CONSOLIDATED STATEMENTS OF INCOME (Unaudited):

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NET INTEREST MARGIN, (Unaudited):

(a)  Includes tax-equivalent adjustments on interest from tax-free municipal securities of $59,000 for the three months ended March 31, 2020 and $93,000 for the three months ended December 31, 2019. Tax-equivalent adjustments were calculated using statutory tax rate of 21% at March 31, 2020 and December 31, 2019.

(b)  Includes tax-equivalent adjustments on interest from tax-free municipal loans of $92,000 for the three months ended March 31, 2020 and $82,000 for the three months ended December 31, 2019, respectively. Tax-equivalent adjustments were calculated using statutory tax rate of 21% at March 31, 2020 and December 31, 2019.

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NET INTEREST MARGIN, CONTINUED (Unaudited):