MPB

Mid Penn Bancorp ($MPB) Insiders Buy $1.14M Over Year, Company Beats Earnings Four Consecutive Quarters

07/02/2025 14:45

Mid Penn Bancorp ($MPB) is gaining attention among investors for one simple reason: management and directors have been consistently buying shares for over a year. The collective purchase on November 1, 2024, in particular, stands out as one of the most remarkable insider trading events in recent history. Mid Penn Bancorp is a Pennsylvania-based regional bank holding company founded in 1868. Through its subsidiary Mid Penn Bank, it provides comprehensive financial services including deposits, loans, trust, and wealth management to individuals and businesses. Despite being a regional bank with 600 employees, it has demonstrated solid growth with an 11% compound annual growth rate over the past five years. The most striking aspect is the insider buying pattern. On November 1, 2024, nearly all directors and executives, including Theodore Mowery, Albert Evans, Matthew De Soto, and John Noone, simultaneously purchased shares. The total purchase amount reached $1.14 million, all executed at the identical price of $29.50 per share. This appears to be a meticulously planned collective purchase. Insider buying continued thereafter. From January to July 2025, approximately 20 purchase transactions occurred with only one sale (Director Brian Hudson, 500 shares). Notably, Director Matthew De Soto made five purchases this year alone, investing over $100,000 total. This represents a strong signal that management has unwavering confidence in the company's future prospects. There are solid reasons behind this insider confidence. Mid Penn Bancorp has exceeded earnings expectations for four consecutive quarters. Q1 2025 earnings per share (EPS) of $0.71 significantly beat the expected $0.65, while revenue of $47.75 million increased 12.9% year-over-year, also surpassing analyst expectations of $46.50 million. Most importantly, the acquisition of William Penn Bancorporation, completed on April 30, 2025, is serving as a game-changer. This $127 million acquisition enabled Mid Penn's entry into the greater Philadelphia market and significantly expanded its loan portfolio and deposit base. Kenneth Stephon, CEO of the acquired company, noted that "the merger enables us to accelerate our growth far more rapidly than we could as an independent company." Financial health is also impressive. Cash holdings of $118.07 million exceed total debt of $113.74 million, with ROE of 8.38% and ROA of 0.94%. The company maintains shareholder-friendly policies with 58 consecutive quarterly dividends. The current annual dividend rate is $0.80 per share, providing a 2.84% dividend yield. Looking at stock performance, shares started around $20 in June 2024, surged in July, and have since traded in a $25-33 range. The current price of $29.10 represents approximately 40% growth year-over-year, though the P/E ratio of 10.11x remains at the lower end of the regional banking industry average (10-15x). Analysts project 12.33% EPS growth for the next fiscal year with a price target of $35, implying 20% upside potential from current levels. The 'buy' rating is maintained due to stable profitability, strategic acquisition benefits, and most notably, continued insider buying behavior. From an investor perspective, the key point is the alignment between insider trading and actual performance. Since management's large-scale purchases in November 2024, the company has successfully completed its acquisition and consistently improved earnings. This suggests insiders are investing based on concrete growth plans rather than mere optimism. However, inherent limitations of regional banking exist. The Pennsylvania-focused business area creates sensitivity to regional economic fluctuations, and growth rates are naturally limited compared to large banks. Additionally, banking industry risks such as interest rate volatility and credit risk remain present. Nevertheless, Mid Penn Bancorp represents a rare case where insider confidence, earnings improvement, and strategic expansion align harmoniously. For small-cap investors, it offers potential value as a relatively undervalued regional banking quality stock. However, investment decisions should carefully consider individual portfolio circumstances and risk tolerance.