Area banks respond to Federal Reserve Survey on lending practices

Tighter standards and weaker demand for commercial and industrial loans (C&I) were among the highlights of the April 2023 Senior Loan Officer Opinion Survey on Bank Lending Practices released recently by the Federal Reserve. 

Banks likewise reported tighter standards and weaker demand for commercial real estate (CRE) loans. 

“With the fight against inflation, this sort of thing happens so it’s not surprising to see our peers experiencing the same things as we’re experiencing here at Peoples,” said Jeffrey Drobins, executive vice president, chief lending officer at Peoples Security Bank & Trust Company. 

“Really, it’s probably the prudent thing that business owners who predict there could be a recession are not looking for credit, they’re holding on to cash. They’re worried about liquidity and leveraging their balancing sheets. Even our existing customers, that’s what we’re seeing them do.” 

Rory Ritrievi, president & CEO at Mid Penn Bancorp, Inc., and Mid Penn Bank, said that through the first quarter of 2023, their organic loan growth had annualized growth of around 11%. 

“That is at the top end of the range we projected for the year even though historically the first quarter is our slowest loan growth quarter of any year,” said Ritrievi. 

“As a publicly traded company I cannot give loan growth numbers beyond that first quarter as we have not made any of the numbers past that point public, but I will say that our loan pipelines are just as brisk in the second quarter as they were in the first.”

Three sets of special questions comprised the April 2023 Senior Loan Officer Opinion Survey (SLOOS): 

  • Changes in banks’ lending policies for CRE loans over the past year. 
  • Reasons for banks changed standards for all loan categories over the first quarter of 2023. 
  • Banks’ exceptions for changes in lending standards over the remainder of 2023 and reasons for these changes. 

Banks responded to the first of questions by reporting tightening lending policies for all categories of CRE loans over the past year. Wider spreads of loan rates over banks’ cost of funds and lower loan-to-value ratios were the changes most frequently reported. 

In response to the second set of questions, banks cited a more uncertain or less favorable economic outlook, reduced tolerance for risk, deterioration in collateral values, and concerns regarding banks’ liquidity positions and funding costs. 

The third set of questions concerning banks’ outlook for lending standards over the rest of 2023 led to banks reporting an expected tightening of standards across all loan categories. An expected deterioration in the credit quality of their loan portfolios and in customers’ collateral values, a reduction in risk tolerance, and concerns regarding bank funding costs, bank liquidity position and deposit outflows were cited frequently by banks as reasons for their expectations of tightening lending standards for the remainder of the year. 

Survey results, as they have been in past releases by the Fed, are tabulated for two domestic bank size categories consisting of large banks and other banks. Large category banks contain $50 billion or more in domestic assets as of Dec. 31, 2022. All other banks have less than $50 billion in domestic assets. 

The largest banks are defined as those with $250 billion or more in total domestic assets as of Dec. 31, 2022, and mid-sized banks as those with assets between $50 billion and $250 billion. Mid-sized banks reported more frequently than the largest or other banks the tightening in standards for business loans, these reports were for both for the first quarter and in expectation for the rest of 2023. 

Mid-sized and other banks reported concerns about their liquidity positions, deposit outflows, and funding costs more frequently than the largest banks, as reasons for tightening standards on all loan categories, both in the first quarter and for the remainder of the year.

Bank celebrates Lehigh Valley branch opening on heels of national honor

Mid Penn Bank
Mid Penn Bank –

Harrisburg-based Mid Penn Bank, which was recently ranked sixth on S&P Global Market Intelligence’s list of Best-Performing Large Community Banks for 2022, is celebrating opening its first full-service Lehigh Valley branch.   

A grand opening will be held April 1 at the new financial center at 3900 Hamilton Blvd. in Allentown. 

The new location offers traditional banking and account services with access to trust, wealth management, and insurance solutions.  

The office also houses the regional commercial lending and cash management teams and is led by Regional President Frank Heston.  

“We are excited to host the grand opening celebration and welcome individuals and businesses from the region to Mid Penn and our brand of banking,” Heston said. 

Its recent S&P ranking was based on the evaluation of 196 institutions. Mid Penn Bank was the only Pennsylvania bank to make the list. 

S&P assessed the performance of community banks and credit unions with assets between $3 billion and $10 billion for the year ended December 31, 2022. The company calculates scores based on metrics such as returns, growth, and efficiency but also places emphasis on the capital strength and risk profile of balance sheets. 


Central Pa. social services agency brings lawsuit against Mid Penn Bank

The Center for Independent Living of Central PA (CILCP) announced Monday that it filed a complaint against Mid Penn Bank for allegedly breaching their contract and acting in bad faith. 

Filed in Harrisburg last Friday, the lawsuit seeks to hold Mid Penn Bank accountable for its actions, or lack of actions, and to obtain compensation for the damages CILCP endured. 

Based in Harrisburg, CILCP is a non-profit social services agency that aids people with disabilities, CILCP charges that for more than 10 years Mid Penn Bank allowed ACH withdrawals to occur in excess of $249,000 from an account that had no prior record of ACH transactions.

In a statement to the Central Penn Business Journal, the bank said it values its relationship with the nonprofit.

“We have always valued our relationship with The Center for Independent Living of Central PA (CILCP). While Mid Penn Bank cannot comment on pending litigation, we take the security of our customers seriously and will respond appropriately in court.”

CILCP states that Mid Penn Bank did not attempt to resolve, investigate, or assist CILCP in recovering the funds, and that Mid Penn Bank’s security procedures did not protect CILCP. 

“It is unprofessional and disappointing that a bank, who holds all the company’s funds, says they are sorry for your almost $250,000 loss, but there is nothing they can do to help get the money back,” CILCP CEO Janetta W. Green said in a statement. 

“As a small non-profit, we depend on our banks to protect our money and when the bank’s security measures fail, the bank should be held accountable.” 

The lawsuit looks to obtain compensation for the damages suffered by CILCP because of Mid Penn Bank’s actions. It also seeks to hold Mid Penn Bank responsible for its alleged lack of effective security procedures. 

Mid Penn Bank has headquarters in Millersburg and mid-state locations in Lehigh, Berks, Cumberland, Dauphin, and Lancaster counties. At time of writing, Mid Penn Bank had not yet responded to an email seeking comment.

Mid Penn to acquire Riverview Financial

Mid Penn Bancorp Inc. of Millersburg has announced it will be acquiring Harrisburg’s Riverview Financial Corp. for approximately $124.7 million. The deal will be an all-stock transaction and the value is based on Mid Penn’s closing stock price of $27.47 on June 29.

The merger has been unanimously approved by the boards of directors of both banks.

Mid Penn said it expects that the acquisition will strengthen its footprint in Central Pennsylvania in addition to providing entry into the growing Lehigh Valley and State College markets.

The transaction creates a combined community bank with approximately $4.8 billion in assets, $3.7 billion in deposits and $3.7 billion in loans.

Following the merger, Mid Penn will be the sixth largest Pennsylvania headquartered bank under $10 billion.

“We are pleased to welcome the Riverview shareholders, customers and employees to the Mid Penn family,” said Mid Penn President and CEO Rory G. Ritrievi. “These two great community bank organizations have been familiar with each other for years as competitors but now get to provide world class customer service to our markets throughout Pennsylvania together. This combination provides strong economic value to both shareholder groups and creates a financial institution with plenty of muscle at a time when it is most important. That muscle should allow us to continue to provide best in class return to both groups of shareholders.”

Under the terms of the merger agreement, shareholders of Riverview common stock will receive 0.4833 shares of Mid Penn common stock for each share of Riverview common stock they own.

The merger agreement is subject to customary regulatory approval and is expected to close in the fourth quarter of 2021.

Mid Penn underwrites public offering of 2.99 million shares of common stock

Mid Penn Bancorp Inc., the parent company of Mid Penn Bank, announced that it has completed its underwritten public offering of 2.99 million shares of common stock at a price of $25 per share, before underwriting discounts.

The aggregate gross proceeds were $74.75 million, with the net expected to be $70.2 million after deducting the underwriting discount and other expenses related to the offering, a release said.

Mid Penn intends to use the money to increase its capital structure, to fund growth and for working capital and other general corporate purposes. The company may also use a portion for future acquisitions, although Mid Penn has no current commitments or agreements in that area, according to the release.

Piper Sandler & Co. and Stephens Inc. served as joint book-running managers for the offering. Mid Penn was represented by Pillar Aught LLC, and the underwriters were represented by Holland & Knight LLP.

Mid Penn Bancorp, headquartered in Millersburg, Dauphin County, has assets of approximately $3 billion. Its footprint includes Berks, Bucks, Chester, Cumberland, Dauphin, Fayette, Lancaster, Luzerne, Montgomery, Northumberland, Schuylkill and Westmoreland counties.

First Priority banks to be rebranded as Mid Penn Bank

Mid Penn Bank will be rebranding a number of its offices in its First Priority Bank Division.

Mid Penn Bancorp Inc. acquired First Priority Bank and its holding company, First Financial Corp. in 2018.

The branches that will be rebranded as Mid Penn Bank are in the bank’s southeastern Pennsylvania market in Berks, Bucks, Chester and Montgomery counties.

“Our professionals in Southeastern Pennsylvania will continue to deliver the same exceptional banking experience that our customers in these regions have come to expect,” said Mid Penn Bank President and CEO Rory G. Ritrievi.  “We are excited to complete the delivery of the Mid Penn Bank brand into the market with the changeover of the name.  Our banking teams will operate in the same locations and from the same offices, providing customized solutions with fast, local decision making and best-in-class service.”

While the interior and exterior signage at all First Priority locations will be updated to reflect the Mid Penn Bank name, the terms of accounts and rates will not be impacted, and all branch operating hours will remain the same.

Mid Penn Bank to close Malvern, Pillow, Vanderbilt locations

Mid Penn Bancorp, the parent company of Mid Penn Bank, announced it will close three branches in the bank’s retail network by the end of the year as part of a consolidation strategy.

The Millersburg-based bank will consolidate locations in Malvern, Chester County, Pillow, Dauphin County and Vanderbilt, Fayette County, effective Dec. 31, 2020. Mid Penn officials said in a statement that the consolidation is part of a strategy to optimize the delivery of banking services in response to shifting consumer preferences.

Rory Ritrievi, Mid Penn president and CEO, said the move comes after seeing a decline in foot traffic at the bank’s traditional brick-and-mortar office locations and an increase in online and mobile preferences among consumers.

“As we prepare for new days ahead in our industry, we are continually evaluating how we deliver our brand of community banking to the customers and communities we serve,” Ritrievi said in a statement.

“We are committed to providing easy access to services when and where our customers expect them,” he said. “As we watch foot traffic in our traditional brick-and-mortar offices decline, we see sharp increases in adoption of on-line and mobile delivery channels in both our consumer and commercial customer bases. The ability to effectively bank anywhere and at any time is now expected to be part of our standard delivery.”

Mid Penn expects no lay-offs or job losses as a result of the consolidation, and employees at the impacted branches will continue to deliver services at other locations in their region, according to a statement released by the bank on Monday.

Mid Penn anticipates annualized savings of more than $150,000 from this move toward greater operational efficiency and anticipates recouping these one-time costs associated with the initiative by the third quarter of 2021.


Mid Penn Bank seeks approval to establish Hazle Township branch

Mid Penn Bank is seeking regulatory approval to open a new branch in Hazle Township, Luzerne County, according to a company statement.

Mid Penn Bank, a subsidiary of Mid Penn Bancorp Inc, recently submitted the application to open a new branch at 1213 North Church Street to the Pennsylvania Department of Banking and Securities and to the Federal Deposit Insurance Corporation.

“We are pleased to announce our intention to expand our presence in Luzerne County with an office in Hazle Township,” said Rory G. Ritrievi, Mid Penn Bank president and CEO. “We look forward to welcoming new and existing customers to our Hazle Township branch while providing personalized service, comprehensive products and a strong commitment to the local community.”

The North Church Street location will provide personal banking, business banking and lending services.

Mid Penn currently has 38 branches serving Berks, Bucks, Chester, Cumberland, Dauphin, Fayette, Lancaster, Luzerne, Montgomery, Northumberland, Schuylkill and Westmoreland counties.

Mid Penn Bancorp, Inc. is headquartered in Millersburg and has been serving the community since 1868. Mid Penn has 38 retail locations in the state of Pennsylvania and total assets of approximately $2 billion.