Dive Brief:

• Harrisburg, Pennsylvania-based Mid Penn Bancorp has agreed to acquire Mount Laurel, New Jersey-based 1st Colonial Bancorp in a cash-and-stock transaction valued at $101 million, the banks said Wednesday.
• The deal, which marks Mid Penn’s seventh bank acquisition in just over a decade, would bring it to $7.2 billion in assets, $6.2 billion in deposits and $5.4 billion in loans and about 60 branches across its footprint.
• The following day, Mid Penn said it was acquiring Cumberland Advisors, a Sarasota, Florida-based investment management firm, for about $5.5 million in a stock-and-cash transaction. Mid Penn will make “additional payments up to $2.2 million if certain milestones” are achieved, according to a Thursday investor presentation about the deal. 

Dive Insight:

The 1st Colonial deal reflects a continuation of Mid Penn’s regional expansion strategy in southeast Pennsylvania and New Jersey. 1st Colonial, founded in 2000, has $877 million in assets, $743 million in deposits, and $640 million in loans, as of June 30. The lender has three 1st Colonial Community Bank branches and one loan production office in the Philadelphia metro area.

The deal is “a strategic move to further expand our footprint into the greater Philadelphia metropolitan area, particularly southern New Jersey,” Mid Penn CEO Rory Ritrievi said in the release. The combination will create “a more powerful, resilient, and dynamic financial institution that is better positioned to invest in local businesses, support nonprofits, and help individuals and families achieve their financial goals,” Ritrievi said.

The merger was unanimously approved by the boards of each company; it awaits approval by 1st Colonial shareholders and regulators. The transaction is expected to close late in the first quarter of 2026 or early in the second, according to a news release.  

With the acquisition, 1st Colonial CEO Robert White will become Mid Penn Bank’s greater Philadelphia metro area market president and senior risk adviser, according to the release. One 1st Colonial director will join the Mid Penn board after the deal closes.

“The combination will allow for an expansion of our product and service offering, as well as bring greater financial capacity for continued investment in our company and our communities,” White said in the release.

About 60% of 1st Colonial common shares will be converted into Mid Penn common stock, while the remaining 40% will be exchanged for cash, the release said. 1st Colonial shareholders can receive either 0.6945 of a share of Mid Penn stock or $18.50 in cash for each 1st Colonial share. The transaction is valued at roughly $20.03 per 1st Colonial common share based on Mid Penn’s closing stock price from Sept. 23 and the 60-40 stock-cash consideration mix. 

The merger is expected to bring about 10% earnings per share accretion in 2026 and 14% in 2027, and will have a tangible book value earnback period of 3.4 years, according to an investor presentation. Upon completion of the deal, 1st Colonial shareholders will own roughly 8% of Mid Penn’s outstanding shares of common stock.

If the deal is scrapped under certain circumstances, 1st Colonial would have to pay about $4 million as a termination fee, according to a Thursday securities filing. 

Mid Penn’s most recent bank acquisition, of William Penn Bancorporation, was announced last November and closed April 30. That $120.3 million deal brought Mid Penn an additional $758 million in assets. 

In the past 13 months, Mid Penn has also bought Dillsburg, Pennsylvania-based employee benefits firm Commonwealth Financial Group and Lititz, Pennsylvania-based Charis Insurance Group. 

The Cumberland acquisition, meanwhile, is expected to bring Mid Penn about $3.3 billion new assets under management. Cumberland was originally headquartered in southern New Jersey, serving the Philadelphia metro area, according to the investor presentation. 

The firm’s 35-person team handles asset management and private wealth services for about 2,500 client accounts. The acquisition “materially accelerates” Mid Penn’s efforts to build out an asset and wealth management unit, adding about $9 million in annualized fee income revenue. 

The transaction is expected to be immediately accretive to earnings – although minimally so, at about 1% – and is projected to close in the fourth quarter. Cumberland leadership and team members will join Mid Penn once the deal closes, and the Cumberland brand and headquarters will be maintained, the bank said.

“We are excited to bring a highly respected team of professionals under the Mid Penn umbrella,” Ritrievi said in the release. “This partnership strengthens our ability to serve customers with deep expertise, shared values and commitment to excellence.”

The Mid Penn-1st Colonial merger is part of a recent spate of bank deals, and the second last week in Pennsylvania. Quakertown, Pennsylvania-based QNB Corp. is buying Victory Bancorp, a smaller in-state peer, in a $40.97 million deal, the bank holding company announced Tuesday.

And Muncie, Indiana-based First Merchants Corp. will buy First Savings Financial in a $241.3 million deal that will give it entry to the neighboring Louisville, Kentucky, market, the banks said Thursday. 

Bank mergers and acquisition activity has ticked up this year, hitting a four-year high in July, bolstered partly by faster regulatory approval timelines, according to S&P Global Market Intelligence. Additionally, “banks are increasingly willing to cross critical asset thresholds due to a more favorable regulatory environment, enhancing their M&A appetite,” the firm said in a Sept. 18 note.