8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K/A

(Amendment No. 1)

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 30, 2021

MID PENN BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

Pennsylvania	1-13677	25-1666413
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

2407 Park Drive Harrisburg, Pennsylvania	1.866.642.7736	17110
(Address of Principal Executive Offices)	( Registrant’s telephone number, including area code)	(Zip Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value per share	MPB	The NASDAQ Stock Market LLC

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) )

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4( c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

MID PENN BANCORP, INC.

FORM 8-K/A

Explanatory Note

On November 30, 2021, Mid Penn Bancorp, Inc. (the “Mid Penn”), pursuant to an Agreement and Plan of Merger, dated as of June 30, 2021 (the “Merger Agreement”), between Mid Penn and Riverview Financial Corporation (“Riverview”), completed its acquisition of Riverview. On December 1, 2021, Mid Penn filed a Current Report on Form 8-K stating that it had completed the acquisition and that the financial information required under Items 9.01(a) and 9.01(b) would be filed within 71 days after the date on which the Current Report on Form 8-K was required to be filed. This amended Current Report on Form 8-K/A contains the required financial statements.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

The financial information required by this Item 9.01(a) of Form 8-K is attached as Exhibit 99.2 to this Current Report on Form 8-K/A.

(b) Pro Form Financial Information.

The financial information required by this Item 9.01(b) of Form 8-K is attached as Exhibit 99.3 to this Current Report on Form 8-K/A.

(d) Exhibits

Exhibit No.	Description
99.2	Unaudited financial statements for Riverview Financial Corporation for the nine months ended September 30, 2021.
99.3	Unaudited pro forma condensed combined financial statements as of and for the nine months ended September 30, 2021.
104	Cover Page Interactive Date File (embedded within the XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MID PENN BANCORP, INC.
Date: February 4, 2022	/s/ Rory G. Ritrievi
	Rory G. Ritrievi
	President and Chief Executive Officer

EX-99.2

Exhibit 99.2

PART I. FINANCIAL INFORMATION:

Item 1. Financial Statements (Unaudited)

Riverview Financial Corporation

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Dollars in thousands, except per share data)

	September 30, 2021			December 31, 2020
Assets:
Cash and due from banks	$	10,842		$	13,511
Interest-bearing deposits in other banks		175,236			36,270
Investment securities available-for-sale		131,705			103,695
Loans held for sale		443			4,338
Loans, net		866,140			1,139,239
Less: allowance for loan losses		10,834			12,200
Net loans		855,306			1,127,039
Premises and equipment, net		16,983			18,147
Accrued interest receivable		2,604			4,216
Intangible assets		1,522			1,918
Other assets		48,152			48,420
Total assets	$	1,242,793		$	1,357,554
Liabilities:
Deposits:
Noninterest-bearing	$	192,556		$	173,600
Interest-bearing		877,018			841,860
Total deposits		1,069,574			1,015,460
Short-term borrowings
Long-term debt		52,004			228,765
Accrued interest payable		847			1,038
Other liabilities		12,792			14,859
Total liabilities		1,135,217			1,260,122
Stockholders’ equity:
Common stock: no par value, authorized 20,000,000 shares; September 30, 2021, issued and outstanding 9,361,967 shares; December 31, 2020, issued and outstanding 9,306,442 shares		103,127			102,662
Capital surplus		292			292
Retained earnings (accumulated deficit)		4,498			(6,457	)
Accumulated other comprehensive income (loss)		(341	)		935
Total stockholders’ equity		107,576			97,432
Total liabilities and stockholders’ equity	$	1,242,793		$	1,357,554

See notes to consolidated financial statements.

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Riverview Financial Corporation

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(Dollars in thousands, except per share data)

	Three Months Ended					Nine Months Ended
September 30,	2021			2020		2021			2020
Interest income:
Interest and fees on loans:
Taxable	$	10,738		$	11,265	$	32,615		$	31,649
Tax-exempt		180			223		538			704
Interest and dividends on investment securities available-for-sale:
Taxable		490			360		1,537			1,291
Tax-exempt		144			71		440			176
Interest on interest-bearing deposits in other banks		40			11		64			112
Total interest income		11,592			11,930		35,194			33,932
Interest expense:
Interest on deposits		746			1,200		2,491			4,384
Interest on short-term borrowings										28
Interest on long-term debt		521			304		1,752			652
Total interest expense		1,267			1,504		4,243			5,064
Net interest income		10,325			10,426		30,951			28,868
(Recovery of) provision for loan losses					1,844		(735	)		5,656
Net interest income after (recovery of) provision for loan losses		10,325			8,582		31,686			23,212
Noninterest income:
Service charges, fees and commissions		1,248			1,099		5,477			3,491
Commission and fees on fiduciary activities		250			246		804			669
Wealth management income		264			220		716			636
Mortgage banking income		104			401		440			900
Bank owned life insurance investment income		178			192		552			578
Net gain on sale of investment securities available-for-sale		44					317			815
Total noninterest income		2,088			2,158		8,306			7,089
Noninterest expense:
Salaries and employee benefits expense		4,511			5,411		14,472			15,452
Net occupancy and equipment expense		1,040			1,428		3,084			3,676
Amortization of intangible assets		132			170		396			509
Goodwill impairment										24,754
Net cost (benefit) of operation of other real estate owned		(22	)		51		(44	)		40
Other expenses		2,933			2,918		8,597			8,713
Total noninterest expense		8,594			9,978		26,505			53,144
Income (loss) before income taxes		3,819			762		13,487			(22,843	)
Income tax expense (benefit)		704			67		2,532			(49	)
Net income (loss)		3,115			695		10,955			(22,794	)
Other comprehensive income:
Unrealized gain (loss) on investment securities available-for-sale		25			114		(1,725	)		2,007
Reclassification adjustment for net gain on sale of investment securities available-for-sale included in net income (loss)		(44	)				(317	)		(815	)
Net change in cash flow hedge		54			49		427			11
Other comprehensive income (loss)		35			163		(1,615	)		1,203
Income tax expense (benefit) related to other comprehensive income		8			35		(339	)		253
Other comprehensive income (loss), net of income taxes		27			128		(1,276	)		950
Comprehensive income (loss)	$	3,142		$	823	$	9,679		$	(21,844	)
Per share data:
Net income (loss):
Basic	$	0.33		$	0.08	$	1.17		$	(2.46	)
Diluted	$	0.33		$	0.08	$	1.17		$	(2.46	)
Average common shares outstanding:
Basic		9,361,967			9,273,666		9,353,546			9,248,856
Diluted		9,390,160			9,273,666		9,366,293			9,248,856

See notes to consolidated financial statements.

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Riverview Financial Corporation

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands, except per share data)

For the nine months ended September 30,	Common Stock		Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, January 1, 2021	$	102,662	$	292	$	(6,457	)	$	935		$	97,432
Net income						10,955						10,955
Other comprehensive income, net of income taxes									(1,276	)		(1,276	)
Issuance under ESPP, 401k and Dividend Reinvestment plans		266										266
Stock based compensation		199										199
Balance, September 30, 2021	$	103,127	$	292	$	4,498		$	(341	)	$	107,576
Balance, January 1, 2020	$	102,206	$	112	$	16,140		$	(348	)	$	118,110
Net income (loss)						(22,794	)					(22,794	)
Other comprehensive income, net of income taxes									950			950
Issuance under ESPP, 401k and Dividend Reinvestment plans		466										466
Stock based compensation				78								78
Dividends declared, $0.15 per share						(1,386	)					(1,386	)
Balance, September 30, 2020	$	102,672	$	190	$	(8,040	)	$	602		$	95,424

For the three months ended September 30,	Common Stock		Capital Surplus		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, July 1, 2021	$	103,058	$	292	$	1,383		$	(368	)	$	104,365
Net income						3,115						3,115
Other comprehensive income, net of income taxes									27			27
Issuance under ESPP, 401k and Dividend Reinvestment plans
Stock based compensation		69										69
Balance, September 30, 2021	$	103,127	$	292	$	4,498		$	(341	)	$	107,576
Balance, July 1, 2020	$	102,552	$	161	$	(8,735	)	$	474		$	94,452
Net income						695						695
Other comprehensive income, net of income taxes									128			128
Issuance under ESPP, 401k and Dividend Reinvestment plans		120										120
Stock based compensation				29								29
Balance, September 30, 2020	$	102,672	$	190	$	(8,040	)	$	602		$	95,424

See notes to consolidated financial statements.

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Riverview Financial Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands, except per share data)

For the Nine Months Ended September 30,	2021			2020
Cash flows from operating activities:
Net income (loss)	$	10,955		$	(22,794	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of premises and equipment		1,021			952
(Recovery of) provision for loan losses		(735	)		5,656
Stock based compensation		199			78
Net amortization of investment securities available-for-sale		1,253			559
Net cost (benefit) of operation of other real estate owned		(44	)		40
Net gain on sale of investment securities available-for-sale		(317	)		(815	)
Premium on sale of deposits		(1,602	)
Amortization of purchase adjustment on loans		(174	)		(592	)
Amortization of intangible assets		396			509
Amortization of assumed discount on long-term debt		66			63
Amortization of long-term debt insurance costs		77
Impairment of goodwill					24,754
Deferred income taxes		421			(779	)
Proceeds from sale of loans originated for sale		17,301			26,921
Net gain on sale of loans originated for sale		(440	)		(900	)
Loans originated for sale		(12,966	)		(30,487	)
Bank owned life insurance investment income		(552	)		(578	)
Net change in:
Accrued interest receivable		1,612			(804	)
Other assets		1,177			2,107
Accrued interest payable		(191	)		156
Other liabilities		(2,067	)		(1,545	)
Net cash provided by operating activities		15,390			2,501
Cash flows from investing activities:
Investment securities available-for-sale:
Purchases		(74,503	)		(42,151	)
Proceeds from repayments		13,073			8,832
Proceeds from sales		30,442			27,168
Proceeds from the sale of other real estate owned		466			355
Net increase in restricted equity securities		(412	)		(837	)
Net (increase) decrease in loans		272,642			(312,627	)
Purchases of premises and equipment		(19	)		(1,519	)
Proceeds from sale of premises and equipment		162
Premium paid on bank owned life insurance		(22	)		(22	)
Net cash provided by (used in) investing activities		241,829			(320,801	)
Cash flows from financing activities:
Net increase in deposits		55,716			90,833
Repayment of long-term debt		(176,904	)
Proceeds from long-term debt					209,997
Issuance under ESPP, 401k and DRP plans		266			466
Cash dividends paid					(1,386	)
Net cash provided by (used in) financing activities		(120,922	)		299,910
Net increase (decrease) in cash and cash equivalents		136,297			(18,390	)
Cash and cash equivalents—beginning		49,781			50,348
Cash and cash equivalents—ending	$	186,078		$	31,958
Supplemental disclosures:
Cash paid during the period for:
Interest	$	4,434		$	4,908
Federal income taxes	$	1,700		$
Supplemental schedule of noncash investing and financing activities:
Other real estate acquired in settlement of loans	$			$	338
Transfer of deposits in sale	$	42,191		$

See notes to consolidated financial statements.

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Riverview Financial Corporation

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

1. Summary of significant accounting policies:

Nature of Operations

Riverview Financial Corporation, (the “Company” or “Riverview”), a bank holding company incorporated under the laws of Pennsylvania, provides a full range of financial services through its wholly-owned subsidiary, Riverview Bank (the “Bank”).

Riverview Bank, with 23 full-service offices and three (3) limited purpose offices, is a full service commercial bank offering a wide range of traditional banking services and financial advisory, insurance and investment services to individuals, municipalities, and small-to-medium sized businesses in the Pennsylvania market areas of Berks, Blair, Bucks, Centre, Clearfield, Dauphin, Huntingdon, Lebanon, Lehigh, Lycoming, Perry, and Schuylkill Counties. The Wealth and Trust Management divisions of the Bank provide trust and investment advisory services to the general public and businesses.

Basis of presentation:

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP’) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the periods presented have been included. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform with the current year’s presentation. These reclassifications did not have any effect on the operating results or financial position of the Company. The condensed consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by GAAP for complete financial statements. Accordingly, these unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K, filed on March 11, 2021.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Actual results could differ from those estimates.

The operating results and financial position of the Company for the three and nine months ended as of September 30, 2021, are not necessarily indicative of the results of operations and financial position that may be expected in the future. This is especially true given the outbreak of the Coronavirus (“COVID-19”) pandemic which may adversely affect the Company’s business results of operations and financial condition for an indefinite period.

The impact of the pandemic on Riverview’s financial results is evolving and uncertain. Net interest income and non-interest income may decrease, and credit-related losses may increase in the future if economic activity slows due to COVID-19. We believe that we may experience a material adverse effect on our business, results of operations and financial condition as a result of the COVID-19 pandemic for an indefinite period. Material adverse impacts may include all or a combination of valuation impairments on Riverview’s intangible assets, investments, loans, or deferred taxes.

Accounting Standards Adopted in 2021

In August 2018, the FASB issued ASU No. 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20) — Disclosure Framework — Changes to the Disclosure Requirements for Defined Benefit Plans”. Subtopic 715-20 addresses the disclosure of other accounting and reporting requirements related to single-employer defined benefit pension or other postretirement benefit plans. The amendments in this Update remove disclosures that no longer are considered cost-beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. Although narrow in scope, the amendments are considered an important part of the Board’s efforts to improve the effectiveness of disclosures in the notes to financial statements by applying concepts in the FASB Concepts Statement, Conceptual Framework for Financial Reporting — Chapter 8: Notes to Financial Statements. The amendments in this Update apply to all employers that sponsor defined benefit pension or other postretirement plans. The ASU is effective for all entities in fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted. The adoption of the guidance did not have a material effect on the Company’s financial position, results of operations or disclosures.

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In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes”, an update to simplify the accounting for income taxes by removing certain exceptions in Topic 740 Income Taxes. In addition, ASU No. 2019-12 improves consistent application of other areas of guidance within Topic 740 by clarifying and amending existing guidance. The new guidance is effective fiscal years beginning after December 15, 2020. The adoption of the guidance did not have a material effect on the Company’s financial position, results of operations or disclosures.    

Recent Accounting Standards

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU No. 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in earlier recognition of credit losses. ASU No. 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities. In November 2018, the FASB issued ASU No. 2018-19—Codification Improvements to Topic 326, Financial Instruments—Credit Losses. The amendments clarify that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. In May 2019, the FASB issued ASU No. 2019-05 “Financial Instruments-Credit Losses (Topic 326)-Targeted Transition Relief” which amends ASU No. 2016-13 to allow companies to irrevocably elect, upon adoption of ASU No, 2016-13, the fair value option on financial instruments that were previously recorded at amortized cost and are within the scope of ASC 326-20 if the instruments are eligible for the fair value option under ASC 825-10. The fair value option election does not apply to held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. In November 2019, the FASB issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses”, which provides specific improvements and clarifications to the guidance in Topic 326. Addresses expected recoveries for purchased financial assets with credit deterioration, transition relief for troubled debt restructurings, disclosures related to accrued interest receivables, financial assets secured by collateral maintenance provisions, and conforming cross-references to Subtopic 805-20. In December 2018, the federal bank regulatory agencies approved a final rule that modifies their regulatory capital rules and provides institutions the option to phase in over a three-year period any day-one regulatory capital effects of the new accounting standard. The Company has formed an internal management committee and engaged a third-party vendor to assist with the transition to the guidance set forth in this update. The committee is currently evaluating the impact of this update on the Company’s Consolidated Financial Statements, but the allowance for credit losses (“ACL”) is expected to increase upon adoption since the allowance will be required to cover the full expected life of the portfolio. The extent of this increase is still being evaluated and will depend on economic conditions and the composition of the loan and lease portfolio at the time of adoption. Management is currently evaluating the preliminary modeling results, including a qualitative framework to account for the drivers of credit losses that are not captured by the quantitative model. In October 2019, the FASB affirmed its previously proposed amendment to delay the effective date for small reporting public companies to interim and annual reporting periods beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848)”. In response to concerns about structural risks of interbank offered rates (“IBORs”), and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The amendments in this Update provide optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to loan and lease agreements, derivative contracts, and other transactions affected by the anticipated transition away from LIBOR toward new interest rate benchmarks. For transactions that are modified because of reference rate reform and that meet certain scope guidance (i) modifications of loan agreements should be accounted for by prospectively adjusting the effective interest rate and the modification will be considered “minor” so that any existing unamortized origination fees/costs would carry forward and continue to be amortized and (ii) modifications of lease agreements should be accounted for as a continuation of the existing agreement with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required for modifications not accounted for as separate contracts. ASU 2020-04 also provides numerous optional expedients for derivative accounting. ASU 2020-04 is effective March 12, 2020 through December 31, 2022. An entity may elect to apply ASU 2020-04 for contract modifications as of January 1, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic within the Codification, the amendments in this ASU must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848): Scope.” ASU 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. The adoption of the guidance is not expected to have a material effect on the Company’s financial position, results of operations or disclosures.

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2. Other comprehensive income (loss):

The components of other comprehensive income (loss) and their related tax effects are reported in the Consolidated Statements of Income and Comprehensive Income (Loss). The accumulated other comprehensive income (loss) included in the Consolidated Balance Sheets relates to net unrealized gains and losses on investment securities available-for-sale and benefit plan and derivative adjustments.

The components of accumulated other comprehensive income (loss) included in stockholders’ equity at September, 2021 and December 31, 2020 is as follows:

	September 30, 2021			December 31, 2020
Net unrealized gain (loss) on investment securities available-for-sale	$	(80	)	$	1,962
Income tax expense (benefit)		(17	)		412
Net of income (loss) taxes		(63	)		1,550
Benefit plan adjustments		(951	)		(951	)
Income tax benefit		(200	)		(200	)
Net of income taxes		(751	)		(751	)
Derivative fair value adjustment		599			172
Income tax benefit		126			36
Net of income taxes		473			136
Accumulated other comprehensive income (loss)	$	(341	)	$	935

Other comprehensive income (loss) and related tax effects for the three and nine months ended September 30, 2021 and 2020 is as follows:

Three months ended September 30,	2021			2020
Unrealized gain on investment securities available-for-sale	$	25		$	114
Net gain on the sale of investment securities available-for-sale(1)		(44	)
Net change in derivative fair value		54			49
Other comprehensive income before taxes		35			163
Income tax expense		8			35
Other comprehensive income	$	27		$	128

Nine months ended September 30,	2021			2020
Unrealized gain (loss) on investment securities available-for-sale	$	(1,725	)	$	2,007
Net gain on the sale of investment securities available-for-sale(1)		(317	)		(815	)
Net change in derivative fair value		427			11
Other comprehensive income (loss) before taxes		(1,615	)		1,203
Income tax expense (benefit)	$	(339	)		253
Other comprehensive income (loss)	$	(1,276	)	$	950

⁽¹⁾ Represents amounts reclassified out of accumulated other comprehensive income and included in gains on sale of investment securities on the consolidated statements of income and comprehensive income.

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3. Earnings per share:

Basic earnings per share is computed by dividing net income (loss) divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance. The following table provides a reconciliation between the computation of basic earnings per share and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020:

Three months ended September 30,	2021		2020
Numerator:
Net income (loss)	$	3,115	$	695
Denominator:
Basic		9,361,967		9,273,666
Dilutive options		28,193
Diluted		9,390,160		9,273,666
Earnings per share:
Basic	$	0.33	$	0.08
Diluted	$	0.33	$	0.08

Nine months ended September 30,	2021		2020
Numerator:
Net income (loss)	$	10,955	$	(22,794	)
Denominator:
Basic		9,353,546		9,248,856
Dilutive options		12,747
Diluted		9,366,293		9,248,856
Earnings per share:
Basic	$	1.17	$	(2.46	)
Diluted	$	1.17	$	(2.46	)

For the three and nine months ended September 30, 2021 there were 18,200 and 68,412 outstanding stock options, respectively, that were excluded from the dilutive earnings per share calculation because their effect was antidilutive. For the three and nine months ended September 30, 2020 there were 172,964 outstanding stock options that were excluded from the dilutive earnings per share calculation because their effect was antidilutive.

4. Investment securities:

The amortized cost and fair value of investment securities available-for-sale aggregated by investment category at September 30, 2021 and December 31, 2020 are summarized as follows:

September 30, 2021	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and municipals:
Taxable	$	22,133	$	301	$	258	$	22,176
Tax-exempt		44,196		89		743		43,542
Mortgage-backed securities:
U.S. Government agencies		35,029		680		98		35,611
U.S. Government-sponsored enterprises		15,177		186		24		15,339
Corporate debt obligations		15,250		64		277		15,037
Total	$	131,785	$	1,320	$	1,400	$	131,705

8

December 31, 2020	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
State and municipals:
Taxable	$	22,317	$	400	$	143	$	22,574
Tax-exempt		17,988		423		16		18,395
Mortgage-backed securities:
U.S. Government agencies		26,051		940				26,991
U.S. Government-sponsored enterprises		24,627		442		17		25,052
Corporate debt obligations		10,750		56		123		10,683
Total	$	101,733	$	2,261	$	299	$	103,695

The maturity distribution of the fair value, which is the net carrying amount, of the debt securities classified as available-for-sale at September 30, 2021, is summarized as follows:    

September 30, 2021	Fair Value
Within one year	$	770
After one but within five years		929
After five but within ten years		22,955
After ten years		56,101
		80,755
Mortgage-backed securities		50,950
Total	$	131,705

Securities with a fair value of $89,410 and $71,676 at September 30, 2021 and December 31, 2020, respectively, were pledged to secure public deposits as required or permitted by law.

Securities and short-term investment activities are conducted with a diverse group of government entities, corporations and state and local municipalities. The counterparty’s creditworthiness and type of collateral is evaluated on a case-by-case basis. At September 30, 2021 and December 31, 2020, there were no significant concentrations of credit risk from any one issuer, with the exception of U.S. Government agencies and sponsored enterprises that exceeded 10.0 percent of stockholders’ equity.

The fair value and gross unrealized losses of investment securities with unrealized losses for which an other-than-temporary impairment (“OTTI”) has not been recognized at September 30, 2021 and December 31, 2020, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position, are summarized as follows:

	Less Than 12 Months				12 Months or More				Total
September 30, 2021	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
State and municipals:
Taxable	$	3,453	$	60		7,625	$	198	$	11,078	$	258
Tax-exempt		33,175		740		631		3		33,806		743
Mortgage-backed securities:
U.S. Government agencies		13,716		98						13,716		98
U.S. Government-sponsored enterprises		4,650		16		1,013		8		5,663		24
Corporate debt obligations		9,473		277						9,473		277
Total	$	64,467	$	1,191	$	9,269	$	209	$	73,736	$	1,400

9

	Less Than 12 Months				12 Months or More				Total
December 31, 2020	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
State and municipals:
Taxable	$	11,586	$	143	$		$		$	11,586	$	143
Tax-exempt		1,737		16						1,737		16
Mortgage-backed securities:
U.S. Government agencies		5,960		17						5,960		17
U.S. Government-sponsored enterprises
Corporate debt obligations						3,378		123		3,378		123
Total	$	19,283	$	176	$	3,378	$	123	$	22,661	$	299

The Company had 59 investment securities, consisting of 10 taxable state and municipal obligations, 32 tax-exempt state and municipal obligations, four U.S. Government agencies, five U.S. Government-sponsored enterprises and eight corporate debt obligation that were in unrealized loss positions at September 30, 2021. Of these securities, none of the securities were in a continuous unrealized loss position for twelve months or more. Management does not consider the unrealized losses on the debt securities, resulting from changes in interest rates, to be OTTI based on historical evidence that indicates the cost of these securities is recoverable within a reasonable period of time in relation to normal cyclical changes in the market rates of interest. Moreover, because there has been no material change in the credit quality of the issuers or other events or circumstances that may cause a significant adverse impact on the fair value of these securities, and management does not intend to sell these securities and it is unlikely that the Company will be required to sell these securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider the unrealized losses to be OTTI at September 30, 2021. There was no OTTI recognized for the three and nine months ended September 30, 2021 and 2020.

The Company had 16 investment securities, consisting of nine taxable state municipal obligations, three tax-exempt state municipal obligations, three mortgage-backed securities and one corporate obligation that were in unrealized loss positions at December 31, 2020. Of these securities, one corporate obligation was in a continuous unrealized loss position for twelve months or more.

5. Loans, net, and allowance for loan losses:

The major classifications of loans outstanding, net of deferred loan origination fees and costs at September 30, 2021 and December 31, 2020 are summarized as follows. Net deferred loan costs were $602 at September 30, 2021 and net deferred loan costs were $701 at December 31, 2020.

	September 30, 2021		December 31, 2020
Commercial	$	139,375	$	359,080
Real estate:
Construction		41,772		73,402
Commercial		497,203		502,495
Residential		181,870		197,596
Consumer		5,920		6,666
Total	$	866,140	$	1,139,239

The Company participated in the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), Paycheck Protection Program (“PPP”), a multi-billion dollar specialized low-interest loan program funded by the U.S. Treasury Department and administered by the U.S. Small Business Administration. The PPP provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related business operating costs. As of September 30, 2021, the Company had PPP loans totaling $23,579, net of unearned loan fees of $599, included in commercial loans. PPP loans totaled $251,810, net of unearned fees of $5,075 as of December 31, 2020.

10

The change in the allowance for loan losses account by major loan classifications for the three and nine months ended September 30, 2021 and 2020 is summarized as follows:

				Real Estate
September 30, 2021	Commercial			Construction			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning Balance, July 1, 2021	$	1,416		$	753		$	6,365		$	1,858		$	111		$	364	$	10,867
Charge-offs		(15	)								(9	)		(33	)				(57	)
Recoveries		3						5						16					24
Provisions		(202	)		(143	)		186			131			1			27
Ending balance	$	1,202		$	610		$	6,556		$	1,980		$	95		$	391	$	10,834
				Real Estate									Real Estate
September 30, 2021	Commercial			Construction			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning Balance, January 1, 2021	$	1,705		$	1,117		$	6,494		$	2,427		$	142		$	315	$	12,200
Charge-offs		(225	)		(37	)		(373	)		(9	)		(118	)				(762	)
Recoveries		60						8			2			61					131
Provisions		(338	)		(470	)		427			(440	)		10			76		(735	)
Ending balance	$	1,202		$	610		$	6,556		$	1,980		$	95		$	391	$	10,834
				Real Estate
September 30, 2020	Commercial			Construction			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning Balance, July 1, 2020	$	1,685		$	741		$	5,078		$	2,070		$	162		$		$	9,736
Charge-offs														(42	)				(42	)
Recoveries		2						57						27					86
Provisions		173			145			1,015			490			21					1,844
Ending balance	$	1,860		$	886		$	6,150		$	2,560		$	168		$		$	11,624
				Real Estate
September 30, 2020	Commercial			Construction			Commercial			Residential			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning Balance, January 1, 2020	$	1,953		$	473		$	3,115		$	1,820		$	155		$		$	7,516
Charge-offs		(899	)					(595	)		(2	)		(243	)				(1,739	)
Recoveries		11						59			1			120					191
Provisions		795			413			3,571			741			136					5,656
Ending balance	$	1,860		$	886		$	6,150		$	2,560		$	168		$		$	11,624

11

The allocation of the allowance for loan losses and related loans by classifications of loans at September 30, 2021 and December 31, 2020 is summarized as follows:

			Real Estate
September 30, 2021	Commercial		Construction		Commercial		Residential		Consumer		Unallocated		Total
Allowance for loan losses:
Ending balance	$	1,202	$	610	$	6,556	$	1,980	$	95	$	391	$	10,834
Ending balance:
individually evaluated for impairment						48								48
Ending balance:
collectively evaluated for impairment		1,202		610		6,508		1,980		95		391		10,786
Ending balance:
purchased credit impaired loans	$		$		$		$		$		$		$
Loans receivable:
Ending balance	$	139,375	$	41,772	$	497,203	$	181,870	$	5,920	$		$	866,140
Ending balance:
individually evaluated for impairment		608				7,447		2,522						10,577
Ending balance:
collectively evaluated for impairment		138,767		41,772		489,563		179,210		5,920				855,232
Ending balance:
purchased credit impaired loans	$		$		$	193	$	138	$		$		$	331

			Real Estate
December 31, 2020	Commercial		Construction		Commercial		Residential		Consumer		Unallocated		Total
Allowance for loan losses:
Ending balance	$	1,705	$	1,117	$	6,494	$	2,427	$	142	$	315	$	12,200
Ending balance:
individually evaluated for impairment
Ending balance:
collectively evaluated for impairment		1,705		1,117		6,494		2,427		142		315		12,200
Ending balance:
purchased credit impaired loans	$		$		$		$		$		$		$
Loan’s receivable:
Ending balance	$	359,080	$	73,402	$	502,495	$	197,596	$	6,666	$		$	1,139,239
Ending balance:
individually evaluated for impairment		1,565				6,444		2,494						10,503
Ending balance:
collectively evaluated for impairment		357,515		73,402		495,674		194,939		6,666				1,128,196
Ending balance:
purchased credit impaired loans	$		$		$	377	$	163	$		$		$	540

The Company segments loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. Non-homogeneous loans are individually analyzed for credit risk by classifying them within the Company’s internal risk rating system. The Company’s risk rating classifications are defined as follows:

• Pass—A loan to borrowers with acceptable credit quality and risk that is not adversely classified as Substandard, Doubtful, Loss or designated as Special Mention.

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• Special Mention—A loan that has potential weaknesses that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Special Mention loans are not adversely classified since they do not expose the Company to sufficient risk to warrant adverse classification.

• Substandard—A loan that is inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

• Doubtful—A loan classified as Doubtful has all the weaknesses inherent in one classified Substandard with the added characteristic that the weaknesses make the collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

• Loss—A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable loan is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may occur in the future. Homogeneous loans not meeting the criteria above are considered pass rated loans and evaluated based on delinquency performance.

The following tables present the major classifications of loans summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system at September 30, 2021 and December 31, 2020:

September 30, 2021	Pass		Special Mention		Substandard		Doubtful	Total
Commercial	$	138,433	$		$	942	$	$	139,375
Real estate:
Construction		40,092				1,680			41,772
Commercial		450,401		29,197		17,605			497,203
Residential		178,210		1,109		2,551			181,870
Consumer		5,920							5,920
Total	$	813,056	$	30,306	$	22,778	$	$	866,140
December 31, 2020	Pass		Special Mention		Substandard		Doubtful	Total
Commercial	$	353,758	$	3,147	$	2,175	$	$	359,080
Real estate:
Construction		63,838		1,817		7,747			73,402
Commercial		451,190		29,180		22,125			502,495
Residential		191,775		2,670		3,151			197,596
Consumer		6,666							6,666
Total	$	1,067,227	$	36,814	$	35,198	$	$	1,139,239

The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans as of September 30, 2021 and December 31, 2020. Purchase credit impaired (“PCI”) loans are excluded from the aging and nonaccrual loan schedules.

	Accrual Loans
September 30, 2021	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Nonaccrual Loans		Total Loans
Commercial	$	531	$		$		$	531	$	138,835	$	9	$	139,375
Real estate:
Construction		185				1,703		1,888		39,884				41,772
Commercial				63				63		495,552		1,395		497,010
Residential		629		252		177		1,058		179,785		889		181,732
Consumer		6		9				15		5,905				5,920
Total	$	1,351	$	324	$	1,880	$	3,555	$	859,961	$	2,293	$	865,809
Purchased credit impaired loans														331
Total Loans													$	866,140

13

	Accrual Loans
December 31, 2020	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Nonaccrual Loans		Total Loans
Commercial	$	64	$	1	$		$	65	$	358,496	$	519	$	359,080
Real estate:
Construction										73,402				73,402
Commercial		1,238		4,063				5,301		496,785		32		502,118
Residential		2,125		2,993		146		5,264		191,299		870		197,433
Consumer		22		20		10		52		6,614				6,666
Total	$	3,449	$	7,077	$	156	$	10,682	$	1,126,596	$	1,421	$	1,138,699
Purchased credit impaired loans														540
Total Loans													$	1,139,239

The following tables summarize information concerning impaired loans as of and for the three and nine months ended September 30, 2021 and 2020, and as of and for the year ended, December 31, 2020 by major loan classification, excluding purchased credit impaired loans:

							This Quarter				Year-to-Date
September 30, 2021	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial	$	608	$	608			$	791	$	8	$	1,243	$	58
Real estate:
Construction								479				643
Commercial		1,757		1,757				1,214		16		1,949		58
Residential		2,660		2,790				2,581		27		2,567		89
Consumer
Total		5,025		5,155				5,065		51		6,402		205
With an allowance recorded:
Commercial
Real estate:
Construction
Commercial		5,883		5,883		48		5,907		110		4,958		253
Residential
Consumer
Total		5,883		5,883		48		5,907		110		4,958		253
Commercial		608		608				791		8		1,243		58
Real estate:
Construction								479				643
Commercial		7,640		7,640		48		7,121		126		6,907		311
Residential		2,660		2,790				2,581		27		2,567		89
Consumer
Total	$	10,908	$	11,038	$	48	$	10,972	$	161	$	11,360	$	458

14

	Recorded Investment		Unpaid Principal Balance		Related Allowance	For the Year Ended
December 31, 2020						Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial	$	1,565	$	1,675		$	1,356	$	416
Real estate:
Construction
Commercial		6,821		6,821			4,392		311
Residential		2,657		2,787			2,493		146
Consumer
Total		11,043		11,283			8,241		873
With an allowance recorded:
Commercial							561
Real estate:
Construction
Commercial							391		65
Residential
Consumer
Total							952		65
Commercial		1,565		1,675			1,917		416
Real estate:
Construction
Commercial		6,821		6,821			4,783		376
Residential		2,657		2,787			2,493		146
Consumer
Total	$	11,043	$	11,283		$	9,193	$	938

							This Quarter				Year-to-Date
September 30, 2020	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance:
Commercial	$	1,732	$	1,842			$	1,896	$	154	$	1,630	$	354
Real estate:
Construction
Commercial		3,124		3,510				6,141		10		4,944		76
Residential		2,652		2,782				2,700		12		2,564		118
Consumer
Total		7,508		8,134				10,737		176		9,138		548
With an allowance recorded:
Commercial		121		121	$	32		121				121
Real estate:
Construction
Commercial		5,769		5,759		1		2,885		61		2,045		65
Residential
Consumer
Total		5,890		5,890		33		3,006		61		2,166		65
Commercial		1,853		1,963		32		2,017		154		1,751		354
Real estate:
Construction
Commercial		8,893		9,279		1		9,026		71		6,989		141
Residential		2,652		2,782				2,700		12		2,564		118
Consumer
Total	$	13,398	$	14,024	$	33	$	13,743	$	237	$	11,304	$	613

15

For the three and nine months ended September 30, interest income related to impaired loans, would have been $21 and $70 in 2021 and $33 and $89 in 2020 had the loans been current and the terms of the loans not been modified.

Troubled debt restructured loans are loans with original terms, interest rate, or both, that have been modified as a result of a deterioration in the borrower’s financial condition and a concession has been granted that the Company would not otherwise consider. Unless on nonaccrual, interest income on these loans is recognized when earned, using the interest method. The Company offers a variety of modifications to borrowers that would be considered concessions. The modification categories offered generally fall within the following categories:

• Rate Modification—A modification in which the interest rate is changed to a below market rate.

• Term Modification—A modification in which the maturity date, timing of payments or frequency of payments is changed.

• Interest Only Modification—A modification in which the loan is converted to interest only payments for a period of time.

• Payment Modification—A modification in which the dollar amount of the payment is changed, other than an interest only modification described above.

• Combination Modification—Any other type of modification, including the use of multiple categories above.

Included in the commercial loan and commercial and residential real estate categories are troubled debt restructures that are classified as impaired. Troubled debt restructures totaled $9,206 at September 30, 2021, $9,985 at December 31, 2020 and $9,893 at September 30, 2020.

There were no loans modified as troubled debt restructures during the three and nine months ended September 30, 2021. There were no loans modified as troubled debt restructures during the third quarter of 2020 and nine loans modified during the nine months ended September 30, 2020 totaling $7,817.

During the three and nine months ended September 30, 2021, there were no defaults on restructured loans. During the three months ended September 30, 2020, there were no defaults on restructured loans and one default on a restructured loan totaling $368 during the nine months ended September 30, 2020.

6. Other assets:

The components of other assets at September 30, 2021 and December 31, 2020 are summarized as follows:

	September 30, 2021		December 31, 2020
Other real estate owned	$		$	422
Bank owned life insurance		31,999		31,425
Restricted equity securities		2,171		1,759
Deferred tax assets		3,825		3,907
Lease right-of-use assets		1,516		2,278
Other assets		8,641		8,629
Total	$	48,152	$	48,420

7. Fair value estimates:

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosure under GAAP. Fair value estimates are calculated without attempting to estimate the value of anticipated future business and the value of certain assets and liabilities that are not considered financial. Accordingly, such assets and liabilities are excluded from disclosure requirements.

In accordance with FASB ASC 820, “Fair Value Measurements and Disclosures”, fair value is the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based upon quoted market prices. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets. In many cases, these values cannot be realized in immediate settlement of the instrument. Current fair value guidance provides a consistent definition of fair value, which focuses on exit price in an orderly transaction that is not a forced

16

liquidation or distressed sale between participants at the measurement date under current market conditions. If there has been a significant decrease in the volume and level of activity for the asset or liability, a change in valuation technique or the use of multiple valuation techniques may be appropriate. In such instances, determining the price at which willing market participants would transact at the measurement date under current market conditions depends on the facts and circumstances and requires the use of significant judgment. The fair value is a reasonable point within the range that is most representative of fair value under current market conditions.

In accordance with GAAP, the Company groups its assets and liabilities generally measured at fair value into three levels based on market information or other fair value estimates in which the assets and liabilities are traded or valued, and the reliability of the assumptions used to determine fair value. These levels include:

• Level 1: Unadjusted quoted prices of identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

• Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

An asset’s or liability’s placement in the fair value hierarchy is based on the lowest level of input that is significant to the fair value estimate.

The following methods and assumptions were used by the Company to calculate fair values and related carrying amounts of assets and liabilities measured at fair value on a recurring basis:

Investment securities: The fair values for U. S. Treasury securities and marketable equity securities are based on quoted market prices from active exchange markets. The fair values of debt securities are based on pricing from a matrix pricing model.

Interest rate swap hedges: The fair value of interest rate swaps is based on an external derivative model using input data of the valuation date.

Assets and liabilities measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020 are summarized as follows:

	Fair Value Measurement Using
September 30, 2021	Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
State and Municipals:
Taxable	$	22,176		$	22,176
Tax-exempt		43,542			43,542
Mortgage-backed securities:
U.S. Government agencies		35,611			35,611
U.S. Government-sponsored enterprises		15,339			15,339
Corporate debt obligations		15,037			15,037
Total	$	131,705		$	131,705
Interest rate swap hedge	$	599		$	599

17

December 31, 2020	Fair Value Measurement Using
	Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
State and municipals:
Taxable	$	22,574		$	22,574
Tax-exempt		18,395			18,395
Mortgage-backed securities:
U.S. Government agencies		26,991			26,991
U.S. Government-sponsored enterprises		25,052			25,052
Corporate debt obligations		10,683			10,683
Total	$	103,695		$	103,695
Interest rate swap hedge	$	172		$	172

Other real estate owned: Assets acquired through loan foreclosure are recorded at fair value less estimated costs to sell, with any difference between the fair value of the property and the carrying value of the loan recorded as a charge-off. If the fair value is higher than the carrying amount of the loan, the excess is recognized first as a recovery and then as noninterest income. Subsequent changes in value are reported as adjustments to the carrying amount and are recorded in noninterest expense. The carrying value of other real estate owned is not re-measured to fair value on a recurring basis but is subject to fair value adjustments when the carrying value differs from the fair value, less estimated selling costs. Fair value is based on recent real estate appraisals, current sale value assessments by real estate agents or pending offers to acquire by independent buyers and is updated at least annually. The Company classifies other real estate owned in level 3 of the fair value hierarchy.

Impaired loans: The fair value of impaired loans is specifically reviewed for purposes of determining the appropriate amount of impairment to be allocated to the ALLL. Fair value is generally measured based on the value of the collateral securing the loans. Collateral may include but is not necessarily limited to real estate, personal or business assets including vehicles, equipment, inventory, accounts receivable or marketable securities. The value of real estate collateral is determined utilizing an income or market valuation approach based on an appraisal conducted by an independent, licensed third-party appraiser (Level 3). The value of business equipment is based on an outside appraisal, if deemed significant, or the net book value on the applicable borrower financial statements. Likewise, values for inventory, accounts receivable or marketable security collateral are based on borrower financial statement balances or aging reports on a discounted basis as appropriate or custodian account statements (Level 3). Impaired loans are measured at fair value on a nonrecurring basis. Any fair value adjustments are recorded in the period incurred as provision for loan and lease losses on the Consolidated Statements of Income.

Assets and liabilities measured at fair value on a nonrecurring basis at September 30, 2021 and December 31, 2020 are summarized as follows:

	Fair Value Measurement Using
September 30, 2021	Amount		(Level 1) Quoted Prices in Active Markets for Identical Assets	(Level 2) Significant Other Observable Inputs	(Level 3) Significant Unobservable Inputs
Impaired loans, net of related allowance	$	5,835			$	5,835
Total	$	5,835			$	5,835
December 31, 2020	Fair Value Measurement Using
	Amount		(Level 1) Quoted Prices in Active Markets for Identical Assets	(Level 2) Significant Other Observable Inputs	(Level 3) Significant Unobservable Inputs
Other real estate owned	$	422			$	422
Total	$	422			$	422

18

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which the Company utilized Level 3 inputs to determine fair value at September 30, 2021 and December 31, 2020.

	Quantitative Information about Level 3 Fair Value Measurements
September 30, 2021	Fair Value Estimate		Valuation Techniques		Unobservable Input		Range (Weighted Average)
Impaired loans		$5,835		Appraisal of collateral		Appraisal adjustments		0.0% to 0.0% (0.0%)
						Liquidation expenses		7.0% to 7.0% (7.0%)
	Quantitative Information about Level 3 Fair Value Measurements
December 31, 2020	Fair Value Estimate		Valuation Techniques		Unobservable Input		Range (Weighted Average)
Other real estate owned		$422		Appraisal of collateral		Appraisal adjustments		20.0% to 14.0% (8.4%)
						Liquidation expenses		10.0% to 10.0% (10.0%)

The carrying and fair values of the Company’s financial instruments at September 30, 2021 and December 31, 2020 and their placement within the fair value hierarchy are as follows:

	Carrying Amount		Fair Value Hierarchy
September 30, 2021			Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	186,078	$	186,078	$	186,078
Investment securities		131,705		131,705			$	131,705
Loans held for sale		443		443				443
Net loans		855,306		840,466					$	840,466
Accrued interest receivable		2,604		2,604				715		1,889
Restricted equity securities		2,171		2,171
Interest rate swap hedges		599		599				599
Financial liabilities:
Deposits	$	1,069,574	$	1,070,933			$	1,070,933
Long-term debt		52,004		54,920				54,920
Accrued interest payable		847		847				847
	Carrying Amount		Fair Value Hierarchy
December 31, 2020			Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	$	49,781	$	49,781	$	49,781
Investment securities available-for-sale		103,695		103,695			$	103,695
Loans held for sale		4,338		4,338				4,338
Net loans		1,127,039		1,116,618					$	1,116,618
Accrued interest receivable		4,216		4,216				578		3,638
Restricted equity securities		1,759		1,759
Interest rate swap hedges		172		172				172
Financial liabilities:
Deposits	$	1,015,460	$	1,018,529			$	1,018,529
Long-term debt		228,765		231,748				231,748
Accrued interest payable		1,038		1,038				1,038

19

8. Subsequent Events:

In preparing these consolidated financial statements, the Company evaluated the events and transactions that occurred from the date of the financial statements through the date these consolidated financial statements were issued. On June 30, 2021, Riverview entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Mid Penn Bancorp, Inc. (“Mid Penn”) pursuant to which Riverview will merge with and into Mid Penn (the “Merger”), with Mid Penn being the surviving corporation in the Merger. Upon consummation of the Merger, Riverview Bank, a wholly-owned subsidiary of Riverview, will be merged with and into Mid Penn Bank, a wholly-owned subsidiary of Mid Penn, with Mid Penn Bank being the surviving bank in the Bank Merger. The Merger Agreement was unanimously approved by the boards of directors of Mid Penn and Riverview. The Merger is expected to close in the fourth quarter of 2021.

20

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma combined condensed consolidated financial information has been prepared using the acquisition method of accounting, giving effect to the merger of Mid Penn Bancorp, Inc. (“Mid Penn” or “MPB”) with Riverview Financial Corporation (“Riverview” or “RIVE”). The merger was completed on November 30, 2021. The following unaudited pro forma combined consolidated financial information is based upon the total number of shares of Riverview common stock outstanding immediately prior to the completion of the merger, which was 9,352,941 and utilizes the exchange ratio of 0.4833 resulting in 4,519,776 shares of MPB common stock issued as acquisition purchase price consideration.

The unaudited pro forma combined condensed financial statements have been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Information, as amended by the final rule, Amendments to Financial Disclosures About Acquired and Disposed Businesses, as adopted by the SEC on May 21, 2020, which requires the depiction of the accounting for the transaction, which we refer to as transaction accounting adjustments, and presentation of the reasonably estimable cost savings and revenue enhancements and other transaction effects that have occurred or are reasonably expected to occur, which we refer to as management’s adjustments. Mid Penn has elected not to present management’s adjustments and will only be presenting transaction accounting adjustments in the following unaudited pro forma condensed combined financial information.

The following unaudited pro forma combined consolidated balance sheet as of September 30, 2021 and income statements for both (i) the twelve months ended December 31, 2020 and (ii) the nine months ended September 30, 2021combine the historical financial statements of Mid Penn and Riverview. The unaudited pro forma consolidated financial statements give effect to the proposed acquisition as if the acquisition occurred on September 30, 2021 with respect to the balance sheet, and at the beginning of the periods for both the year ended December 31, 2020 and the nine months ended September 30, 2021, with respect to the statement of operations. The unaudited pro forma consolidated financial statements were prepared with Mid Penn as the acquirer and Riverview as the acquiree under the acquisition method of accounting. Accordingly, the consideration paid by Mid Penn to complete the acquisition of Riverview will be allocated to Riverview’s assets and liabilities based upon their estimated fair values as of the date of completion of the acquisition. The allocation is dependent upon certain valuations and other studies that have not been finalized at the time of this filing; however, preliminary valuations based on the fair value of the acquired assets and liabilities have been estimated and included in the unaudited pro forma financial statements.

The final allocation of the purchase price will be determined after completion of the merger and after completion of thorough analyses to determine the fair value of Riverview’s tangible and identifiable intangible assets and liabilities as of the date the merger was completed. Increases or decreases in the estimated fair values of the net assets as compared with the information shown in the unaudited pro forma combined condensed consolidated financial information may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact Mid Penn’s consolidated statement of operations due to adjustments in yield and/or amortization of the adjusted assets or liabilities. Any changes to Riverview’s shareholders’ equity, includingresults of operations from September 30, 2021 through the date the merger was completed will also change the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially different from the unaudited transaction accounting adjustments presented herein. The actual value of Mid Penn’s common stock to be recorded as consideration in the merger was based on the $31.46 closing price of MPB common stock at the time of the merger completion date on November 30, 2021.

The pro forma income statement and per share data information does not include anticipated cost savings or revenue enhancements, nor does it include one-time merger-related expenses which will be expensed against income. Mid Penn is currently in the process of assessing the two companies’ personnel, benefits plans, premises, equipment, computer systems and service contracts to determine where the companies may take advantage of redundancies or where it will be beneficial or necessary to convert to one system. Certain decisions arising from these assessments may involve canceling contracts between either Riverview or Mid Penn and certain service providers. There is no assurance that the anticipated cost savings will be realized on the anticipated time schedule or at all.

The pro forma combined basic and diluted earnings per share of Mid Penn common stock is based on the pro forma combined net income per common share for Riverview and Mid Penn divided by the pro forma basic or

II-1

diluted common shares of the combined entities. The pro forma information includes adjustments related to the fair value of assets and liabilities of Riverview and is subject to adjustment as additional information becomes available and as final merger date analyses are performed. The pro forma combined balance sheet and book value per share data does include the impact of merger-related expenses on the balance sheet with Riverview’s after-tax charges currently estimated at $6,531,000, illustrated as an adjustment to accrued other liabilities, and Mid Penn’s after-tax estimated charges of $8,610,000, illustrated as an adjustment to retained earnings and to accrued other liabilities. The pro forma combined book value and tangible book value of Mid Penn common stock is based on the pro forma combined common stockholders’ equity of Riverview and Mid Penn divided by total pro forma common shares of the combined entities.

Certain reclassification adjustments have been made to Riverview’s financial statements to conform to Mid Penn’s financial statement presentation. The unaudited pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenue and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during this period.

The unaudited pro forma combined condensed consolidated financial information has been derived from and should be read in conjunction with Mid Penn’s historical consolidated financial information and related notes, which are contained in Mid Penn’s Annual Report on Form 10-K for the year ended December 31, 2020 and Quarterly Report on Form 10-Q for the nine-month period ended September 30, 2021, Riverview’s audited financial statements for the year ended December 31, 2020, which were included in Mid Penn’s Form S-4 filed on September 13, 2021, as amended (File No. 333-259490), and Riverview’s unaudited financial statements for the nine-month period ended September 30, 2021, which appear elsewhere in this document.

The unaudited pro forma data are qualified by the statements set forth under this caption and should not be considered indicative of the market value of Mid Penn common stock or the actual or future results of operations of Mid Penn for any period. Actual results may be materially different than the pro forma information presented.

II-2

Pro Forma Combined Consolidated Balance Sheet as of September 30, 2021

Unaudited (Dollars in thousands, except share and per common share data)

	Mid Penn Bancorp, Inc.			Riverview Financial Corp.			Unadjusted Combined			Transaction Accounting Adjustments				Pro Forma Combined
ASSETS
Cash and due from banks	$	40,134		$	10,842		$	50,976		$	(792	)	A	$	50,184
Interest-bearing balances with other financial institutions		2,536			175,236			177,772			—				177,772
Federal funds sold		712,272			—			712,272			—				712,272
Total cash and cash equivalents		754,942			186,078			941,020			(792	)			940,228
Investment securities available for sale, at fair value		5,015			131,705			136,720			—		B		136,720
Investment securities held to maturity, at amortized cost		152,791			—			152,791			—				152,791
Equity securities available for sale, at fair value		505			—			505			—				505
Loans held for sale		23,154			443			23,597			—				23,597
Loans and leases, net of unearned interest		2,370,429			866,140			3,236,569			(20,285	)	C		3,216,284
Less: Allowance for loan and lease losses		(14,233	)		(10,834	)		(25,067	)		10,834		D		(14,233	)
Net loans and leases		2,356,196			855,306			3,211,502			(9,451	)			3,202,051
Bank premises and equipment, net		25,562			16,983			42,545			(5,005	)	E		37,540
Operating lease right of use asset		9,942			1,516			11,458			(1,297	)	F		10,161
Finance lease right of use asset		3,132			—			3,132			—				3,132
Cash surrender value of life insurance		17,406			31,999			49,405			—				49,405
Restricted investment in bank stocks		7,906			2,171			10,077			—				10,077
Foreclosed assets held for sale		11			—			11			—		G		11
Deferred income taxes		4,133			3,825			7,958			5,227		H		13,185
Goodwill		62,840			—			62,840			48,904		I		111,744
Core deposit and other intangibles, net		3,537			1,522			5,059			4,734		J		9,793
Accrued interest receivable and other assets		26,115			11,245			37,360			—				37,360
Total Assets	$	3,453,187		$	1,242,793		$	4,695,980		$	42,320			$	4,738,300
LIABILITIES & SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	661,890		$	192,556		$	854,446		$	—			$	854,446
Interest-bearing demand		745,833			349,543			1,095,376			—				1,095,376
Money market		905,742			151,413			1,057,155			—				1,057,155
Savings		205,842			173,453			379,295			—				379,295
Time		442,574			202,609			645,183			1,911		K		647,094
Total Deposits		2,961,881			1,069,574			4,031,455			1,911				4,033,366
Short-term borrowings		—			—			—			—				—
Long-term debt		119,457			52,004			171,461			(2,325	)	L		169,136
Operating lease liability		10,950			1,531			12,481			(1,297	)	F		11,184
Accrued interest payable and other liabilities		11,591			12,108			23,699			18,025		M		41,724
Total Liabilities		3,103,879			1,135,217			4,239,096			16,314				4,255,410
Shareholders’ Equity:
Common stock		11,532			103,127			114,659			(98,607	)	N		16,052
Additional paid-in capital		246,830			292			247,122			137,380		N		384,502
Retained earnings		92,722			4,498			97,220			(13,108	)	M, N		84,112
Accumulated other comprehensive income (loss)		147			(341	)		(194	)		341		N		147
Treasury stock		(1,923	)		—			(1,923	)		—				(1,923	)
Total Shareholders’ Equity		349,308			107,576			456,884			26,006				482,890
Total Liabilities and Shareholders’ Equity	$	3,453,187		$	1,242,793		$	4,695,980		$	42,320			$	4,738,300
Per Common Share Data:
Common shares issued		11,532,006			9,361,967						(4,519,776	)			16,374,197
Common shares outstanding		11,433,554			9,361,967						(4,519,776	)			16,275,745
Book value per common share	$	30.55		$	11.49									$	29.67

II-3

Pro Forma Combined Consolidated Statement of Income

For the Nine Months Ended September 30, 2021

Unaudited (Dollars in thousands, exept share and per common share data)

	Mid Penn Bancorp, Inc.			Riverview Financial Corp.			Unadjusted Combined			Transaction Accounting Adjustments				Pro Forma Combined
INTEREST INCOME
Interest & fees on loans and leases	$	87,755		$	33,153		$	120,908		$	1,501		C		122,409
Interest and dividends on investment securities:
U.S. Treasury and government agency		688			701			1,389			—				1,389
State and political subdivision obligations, tax-exempt		834			440			1,274			—				1,274
Other securities		870			836			1,706			—				1,706
Total interest and dividends on investment securities		2,392			1,977			4,369			—				4,369
Interest on interest-bearing balances		5			64			69			—				69
Interest on federal funds sold		485			—			485			—				485
Total Interest Income		90,637			35,194			125,831			1,501				127,332
INTEREST EXPENSE
Interest on deposits		8,791			2,491			11,282			(559	)	K		10,723
Interest on short-term borrowings		539			—			539			—				539
Interest on long-term and subordinated debt		2,111			1,752			3,863			(506	)	L		3,357
Total Interest Expense		11,441			4,243			15,684			(1,065	)			14,619
Net Interest Income		79,196			30,951			110,147			2,566				112,713
PROVISION FOR (RECOVERY OF) LOAN AND LEASE LOSSES		2,575			(735	)		1,840			—				1,840
Net Interest Income After Provision for (Recovery Of) Loan and Lease Losses		76,621			31,686			108,307			2,566				110,873
NONINTEREST INCOME
Mortgage banking income		8,382			440			8,822			—				8,822
Income from fiduciary activities		1,716			804			2,520			—				2,520
Service charges on deposits		552			1,642			2,194			—				2,194
ATM debit card interchange income		1,854			1,497			3,351			—				3,351
Net gain on sales of SBA loans		560			—			560			—				560
Merchant services income		359			33			392			—				392
Earnings from cash surrender value of life insurance		223			552			775			—				775
Net gain on sales of investment securities		79			317			396			—				396
Other income		2,148			3,021			5,169			—				5,169
Total Noninterest Income		15,873			8,306			24,179			—				24,179
NONINTEREST EXPENSE
Salaries and employee benefits		29,873			14,472			44,345			—				44,345
Occupancy, net		4,115			1,515			5,630			—				5,630
Equipment expense		2,237			1,570			3,807			—				3,807
Software licensing and data processing		4,493			2,468			6,961			—				6,961
Pennsylvania Bank Shares tax expense		1,022			850			1,872			—				1,872
FDIC Assessment		1,364			355			1,719			—				1,719
Legal and professional fees		1,591			569			2,160			—				2,160
Charitable contrbutions qualifying for State tax credits		635			—			635			—				635
Mortgage banking profit-sharing expense		2,005			—			2,005			—				2,005
Marketing and advertising expense		466			440			906			—				906
Telephone expense		409			420			829			—				829
Gain on sale or write-down of foreclosed assets		(26	)		(44	)		(70	)		—				(70	)
Intangible amortization		823			396			1,219			457		O		1,676
Merger and acquisition expense		720			560			1,280			(1,280	)	M		—
Other expenses		7,306			2,934			10,240			—				10,240
Total Noninterest Expense		57,033			26,505			83,538			(823	)			82,715
INCOME BEFORE PROVISION FOR INCOME TAXES		35,461			13,487			48,948			3,389				52,337
Provision for income taxes		6,749			2,532			9,281			712		P		9,993
NET INCOME	$	28,712		$	10,955		$	39,667		$	2,677			$	42,344
Weighted average common shares outstanding:
Basic		10,064,655			9,353,546						(4,519,776	)			14,898,425
Diluted		10,077,408			9,366,293						(4,519,776	)			14,898,425
Earnings per common share:
Basic	$	2.85		$	1.17									$	2.84
Diluted	$	2.85		$	1.17									$	2.84

II-4

Pro Forma Combined Consolidated Statement of Income

For the Year Ended December 31, 2020

Unaudited (Dollars in thousands, exept share and per common share data)

	Mid Penn Bancorp, Inc.		Riverview Financial Corp.			Unadjusted Combined		Transaction Accounting Adjustments				Pro Forma Combined
INTEREST INCOME
Interest & fees on loans and leases	$	103,507	$	43,935		$	147,442	$	1,815		C		149,257
Interest and dividends on investment securities:
U.S. Treasury and government agency		1,631		1,110			2,741		—				2,741
State and political subdivision obligations, tax-exempt		1,008		289			1,297		—				1,297
Other securities		1,253		592			1,845		—				1,845
Total interest and dividends on investment securities		3,892		1,991			5,883		—				5,883
Interest on interest-bearing balances		39		20			59		—				59
Interest on federal funds sold		497		100			597		—				597
Total Interest Income		107,935		46,046			153,981		1,815				155,796
INTEREST EXPENSE
Interest on deposits		16,399		5,419			21,818		(1,161	)	K		20,657
Interest on short-term borrowings		371		443			814		—				814
Interest on long-term and subordinated debt		2,957		921			3,878		(576	)	L		3,302
Total Interest Expense		19,727		6,783			26,510		(1,737	)			24,773
Net Interest Income		88,208		39,263			127,471		3,552				131,023
PROVISION FOR LOAN AND LEASE LOSSES		4,200		6,282			10,482		—				10,482
Net Interest Income After Provision for Loan and Lease Losses		84,008		32,981			116,989		3,552				120,541
NONINTEREST INCOME
Mortgage banking income		9,682		1,233			10,915		—				10,915
Income from fiduciary activities		1,694		961			2,655		—				2,655
Service charges on deposits		637		2,451			3,088		—				3,088
ATM debit card interchange income		1,960		1,752			3,712		—				3,712
Net gain on sales of SBA loans		442		—			442		—				442
Merchant services income		392		44			436		—				436
Earnings from cash surrender value of life insurance		301		755			1,056		—				1,056
Net gain on sales of investment securities		467		815			1,282		—				1,282
Other income		2,333		762			3,095		—				3,095
Total Noninterest Income		17,908		8,773			26,681		—				26,681
NONINTEREST EXPENSE
Salaries and employee benefits		37,758		20,207			57,965		—				57,965
Occupancy, net		5,505		3,424			8,929		—				8,929
Equipment expense		2,910		1,717			4,627		—				4,627
Software licensing and data processing		5,286		3,999			9,285		—				9,285
Pennsylvania Bank Shares tax expense		583		770			1,353		—				1,353
FDIC Assessment		1,680		732			2,412		—				2,412
Legal and professional fees		1,665		1,335			3,000		—				3,000
Charitable contrbutions qualifying for State tax credits		1,342		200			1,542		—				1,542
Mortgage banking profit-sharing expense		2,004		—			2,004		—				2,004
Marketing and advertising expense		542		369			911		—				911
Telephone expense		539		694			1,233		—				1,233
Loss on sale or write-down of foreclosed assets		333		55			388		—				388
Intangible amortization		1,398		818			2,216		173		O		2,389
Goodwill impairment		—		24,754			24,754		—				24,754
Other expenses		9,032		3,634			12,666		—				12,666
Total Noninterest Expense		70,577		62,708			133,285		173				133,458
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		31,339		(20,954	)		10,385		3,379				13,764
Provision for income taxes		5,130		257			5,387		710		P		6,097
NET INCOME (LOSS)	$	26,209	$	(21,211	)	$	4,998	$	2,669			$	7,667
Weighted average common shares outstanding:
Basic		8,439,427		9,258,493					(4,519,776	)			13,178,144
Diluted		8,443,092		9,258,493					(4,519,776	)			13,178,144
Earnings per common share:
Basic	$	3.11	$	(2.29	)							$	0.58
Diluted	$	3.10	$	(2.29	)							$	0.58

II-5

Explanatory Notes to the Unaudited Pro Forma Combined Consolidated Financial Statements

A. Under the June 30, 2021 Definitive Merger Agreement among Mid Penn Bancorp, Inc. (“MPB”), Mid Penn Bank (“Mid Penn”), Riverview Financial Corp. (“RIVE”) and Riverview Bank (“Riverview”), shareholders of RIVE common stock received, for each share of RIVE held at the effective time of the merger, 0.4833 shares of MPB common stock as merger consideration. This exchange ratio did not change as a result of changes in the MPB share price. The actual final value and allocation of the merger consideration paid by MPB in common stock and cash following the closing of the merger of Riverview with and into Mid Penn effective November 30, 2021, based upon the relevant provisions of the Definitive Merger Agreement, was as follows:

Mid Penn Bancorp, Inc. Acquisition of Riverview Financial Corp.

Projected Acquisition Purchase Price Consideration Including Allocation Between Cash and Mid Penn Stock

(Dollars in Thousands except per share data)
Total Acquisition Purchase Price Considerations:
Stock Consideration - Common Stock Outstanding: Riverview shareholders representing 9,352,941 shares outstanding received 0.4833 shares of Mid Penn common stock for each Riverview share as merger consideration. Mid Penn issued 4,519,776 new shares of common stock in connection with the merger. The value of Mid Penn common stock issued as merger consideration was $31.46 per share.	$	142,192
Cash Consideration - Cash in Lieu of Fractional Shares: The conversion of Riverview common stock to Mid Penn common stock resulted in 500 fractional shares paid out in cash based upon the closing price of $31.46 per share.		16
Cash Consideration - Buyout of Stock Awards: In accordance with the definitive merger agreement, outstanding options at the time of the merger will be converted into the right to receive an amount in cash equal to the product obtained by multiplying the aggregate number of shares of Riverview common stock that were issuable upon exercise of each option outstanding, and the closing sale price of Mid Penn’s common stock on the fifth (5th) business day prior to the merger closing date multiplied by the exchange ratio, less the per share exercise price of each option outstanding, without interest. There were 172,964 options outstanding to purchase Riverview common stock and the closing price of Mid Penn common stock was at $30.76 per share on the fifth business day prior to the merger closing date. Additionally, 2,500 shares of restricted stock were paid out in cash.		776
Total Acquisition Purchase Price Consideration:	$	142,984

B. The available-for-sale portfolio will be maintained at the same classification post-merger and will be acquired by Mid Penn at the fair value of the securities as of the merger date.

II-6

C. The estimated balance sheet adjustments to Riverview’s loan portfolio reflect fair value credit and interest rate discounts of $13,415,000. The earnings impact of the credit and interest rate discounts is projected to be recognized using an accelerated amortization method over the expected life of the acquired loan portfolio, resulting in an estimated increase to interest income of $2,090,000 in the first year post-merger and $1,570,000 in the first nine months post-merger. Additionally, the balance sheet adjustment to the loan portfolio also includes a reduction of $6,870,000 as a result of the anticipated merger date redemption of subordinated debt issued by Mid Penn and held as an outstanding loan receivable by Riverview as of September 30, 2021. The redemption of Mid Penn’s subordinated debt would reduce loan interest income by $275,000 in the first year post merger and $69,000 in the first nine months post merger.

D. This balance sheet adjustment reflects the reversal of the Riverview allowance for loan losses of $10,834,000 in accordance with the GAAP method of acquisition accounting requiring the recording of acquired loans at fair value.

E. This balance sheet adjustment to Riverview’s bank premises and equipment includes: (i) fair value discounts of $6,485,000 determined using recent certified appraisals for real estate properties to be retained by Mid Penn; (ii) fair value discounts of $789,000 based upon preliminary condition and value assessments of fixed assets including equipment, and furniture and fixtures, and (iii) the reversal of remaining purchase accounting discounts recorded in fixed assets by Riverview Bank from its previous acquisition activity totaling $2,269,000. Combined, the preliminary estimate of these fair value balance sheet adjustments to Riverview’s bank premises and equipment totals $5,005,000.

F. The estimated balance sheet adjustment of $1,297,000 to the operating lease right of use asset includes the anticipated reassessment of leased facilities, with a similar adjustment to the operating lease liability and minimal anticipated goodwill impact.

G. Riverview held no foreclosed real estate assets as of September 30, 2021. Under GAAP foreclosed assets must be carried at fair value therefore no fair value adjustment would be recorded should a foreclosed property be assumed prior to the merger date.

H. The pro-forma combined deferred tax asset of $5,227,000 was valued based upon an assumed corporate tax rate of 21 percent and includes both (i) $3,587,000 for the related deferred tax impact of purchase accounting adjustments, and (ii) $1,640,000 tax benefit related to one-time merger charges.

I. For purposes of this unaudited pro forma combined consolidated balance sheet as of September 30, 2021, goodwill of $48,904,000 is projected to result from the Mid Penn acquisition of Riverview. However, the eventual amount actually recorded as goodwill will be determined as part of the final acquisition accounting as of the merger date, and the goodwill amount may be adjusted from this projection based on changes in financial condition and transactions subsequent to September 30, 2021, as additional information becomes available and updated analyses are performed. The goodwill will not be amortized, but will be measured for impairment annually (or more frequently if warranted). The unaudited pro forma combined consolidated statement of income projects no goodwill impairment in the first year post merger. The following reflects the unaudited pro forma calculation of goodwill based upon estimated fair value adjustments to Riverview assets to be acquired and liabilities to be assumed:

II-7

Goodwill Resulting from the Mid Penn Bancorp, Inc. Acquisition of Riverview Financial Corp.

Pro Forma as of September 30, 2021

(Dollars in Thousands except per share data)
Acqusition Purchase Price Consideration
($792 in Cash and $142,192 in MPB stock)*
				$142,984
Net Assets Acquired:
Riverview Stockholders’ Equity	$	107,576
Core Deposit Intangible		4,096
Customer List Intangible		2,160
Adjustments to Riverview Assets acquired to reflect fair value:
Loans - general credit and interest rate marks		(13,415	)
Allowance for loan losses		10,834
Premises and Equipment		(5,005	)
Pre-transaction remaining CDI of Riverview		(1,522	)
Deferred tax impact of fair value adjustments		3,587
Adjustments to Riverview Liabilities assumed to reflect fair value:
Time deposits		(1,911	)
Pre-transaction remaining marks on long-term debt		(2,243	)
Subordinated debt and trust preferred		(2,302	)
Seller transaction merger liabilities accrued at closing		(7,775	)
					94,080
Goodwill resulting from merger				$	48,904

* actual paid by Mid Penn Bancorp, Inc. following closing of transaction on November 30, 2021

J. This balance sheet adjustment represents the estimated fair value of the core deposit intangible (CDI) asset of $4,096,000 as well as the estimated fair value of a customer list intangible of $2,160,000. With the reversal of Riverview’s pre-acquisition CDI of $1,522,000, the net required adjustment to reflect combined CDI is $4,734,000. The core deposit intangible and customer list intangible will be amortized over a ten-year period using a sum of the year’s digits basis, resulting in $1,138,000 of additional intangible amortization in the first year post merger.

K. This balance sheet amount represents a fair value premium of $1,911,000 for Riverview’s certificates of deposit. This adjustment will be recognized using an amortization method based upon the maturities of the deposit liabilities and is expected to decrease interest expense by $1,161,000 in the first year post merger and $559,000 in the first nine months post merger.

L. This balance sheet amount includes both (i) a fair value premium of $2,302,000 to reflect the estimated fair value of Riverview’s subordinated debt and trust preferred securities outstanding, and (ii) the reversal of $2,243,000 of pre-transaction fair value discount on subordinated debt and trust preferred securities acquired by Riverview in a previous merger transaction. Additionally, the balance sheet amount reflects the redemption of $6,870,000 of subordinated debt issued by Mid Penn and held by Riverview. The redemption of Mid Penn’s subordinated debt would reduce interest expense by $275,000 in the first year post merger and $69,000 in the first nine months post merger. The fair value premium amount of $2,302,000 will be recognized on the income statement using an amortization method based upon the estimated remaining maturity of the subordinated debt, resulting in an expected reduction to interest expense of $574,000 in the first year post merger and $428,000 in the first nine months post merger.

M. This balance sheet adjustment reflects the accrual of one-time merger-related charges for Mid Penn and Riverview: (a) Riverview pre-tax charges are estimated at $7,775,000 ($6,531,000 after-tax) and are included as a pro forma fair value liability accrual, and (b) Mid Penn pre-tax charges are estimated at $10,250,000 ($8,610,000 after-tax) and are included as a pro forma liability accrual with the after-tax cost as reduction to retained earnings. The pro forma income statement does not include one-time merger-related expenses which will be expensed against income when incurred. It is noted that a tax benefit was not taken for certain merger obligations and costs that were not considered to be tax deductible.

N. These balance sheet adjustments to the common stock and additional paid-in-capital accounts, and to the number of common shares outstanding, reflect the impact of actual acquisition consideration of $142,984,000 paid primarily in MPB common stock, as further detailed in Explanatory Note A. The adjustments also reflect the reclassification of Riverview’s historical equity accounts (common stock, accumulated other comprehensive loss, and retained earnings) into additional paid in capital.

II-8

O. This income statement adjustment to intangible amortization expense reflects both (i) the reversal of the pre-merger Riverview CDI amortization expense of $818,000 in the first year post merger (consistent with the reversal of Riverview’s CDI asset for fair value purchase accounting purposes), and (ii) $1,137,000 of amortization expense in the first year post merger related to the new CDI and the customer list intangible resulting from this acquisition, with such amortization being determined based upon the sum-of-the-years-digits method over 10 years from the date of acquisition. Comparatively, for the first nine months post merger, the reversal of CDI expense would be $396,000 and the new CDI amortization is estimated to be $853,000.

P. The statutory federal income tax rate of 21 percent was used to determine the income tax expense impact of merger-related adjustments.

II-9

XML

Document and Entity Information	Nov. 30, 2021
Cover [Abstract]
Entity Registrant Name	MID PENN BANCORP INC
Amendment Flag	true
Entity Central Index Key	0000879635
Document Type	8-K/A
Document Period End Date	Nov. 30, 2021
Entity Incorporation State Country Code	PA
Entity File Number	1-13677
Entity Tax Identification Number	25-1666413
Entity Address, Address Line One	2407 Park Drive
Entity Address, City or Town	Harrisburg
Entity Address, State or Province	PA
City Area Code	1.866
Local Phone Number	642.7736
Entity Address, Postal Zip Code	17110
Security 12b Title	Common Stock, $1.00 par value per share
Trading Symbol	MPB
Security Exchange Name	NASDAQ
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Amendment Description	On November 30, 2021, Mid Penn Bancorp, Inc. (the “Mid Penn”), pursuant to an Agreement and Plan of Merger, dated as of June 30, 2021 (the “Merger Agreement”), between Mid Penn and Riverview Financial Corporation (“Riverview”), completed its acquisition of Riverview. On December 1, 2021, Mid Penn filed a Current Report on Form 8-K stating that it had completed the acquisition and that the financial information required under Items 9.01(a) and 9.01(b) would be filed within 71 days after the date on which the Current Report on Form 8-K was required to be filed. This amended Current Report on Form 8-K/A contains the required financial statements.