Mid Penn Bancorp stock rating reiterated at Outperform by KBW

Investing.com - Keefe, Bruyette & Woods (KBW) has reiterated an Outperform rating on Mid Penn Bancorp (NASDAQ:MPB) with a price target of $34.00, according to a research note issued by the firm.

KBW analyst Tim Switzer maintained the positive outlook following Mid Penn Bancorp’s announcement that it plans to acquire 1st Colonial Bancorp, Inc. The firm noted that while investors might be "modestly surprised" by this move given MPB’s recent completion of its WMPN acquisition, KBW expressed confidence in management’s experience to handle the integration of both acquisitions. According to InvestingPro, the company has maintained dividend payments for 15 consecutive years, demonstrating consistent financial stability.

The research firm does not anticipate a significant market reaction to the announcement, despite the relatively longer tangible book value earnback period of 3.4 years for the proposed transaction.

KBW cited several offsetting positive factors, including the smaller size of the deal (representing 14% of assets), mid-teens earnings per share accretion, low commercial real estate concentration, and strategic benefits of strengthening Mid Penn Bancorp’s presence in Philadelphia.

The acquisition represents a strategic move for Mid Penn Bancorp to deepen its footprint in the Philadelphia market, according to the research note.

In other recent news, Mid Penn Bancorp, Inc. has announced its plan to acquire 1st Colonial Bancorp, Inc. in a transaction valued at approximately $101 million. The deal, which has received unanimous approval from the boards of both companies, will involve a mix of cash and stock. Specifically, 60% of 1st Colonial shares will be converted into Mid Penn common stock, while the remaining 40% will be exchanged for cash. This strategic move is expected to enhance Mid Penn’s presence in the greater Philadelphia metropolitan area. Additionally, Mid Penn Bancorp has updated its executive retirement and change in control agreements. The company amended supplemental executive retirement plan agreements for executives Justin Webb, Scott Micklewright, and Jordan Space. Under these revised agreements, each executive will receive an annual normal retirement benefit of $125,000. The benefits for Webb and Micklewright will increase by 2.0% each year after full vesting until fully paid.

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