Mid Penn % of Total William Penn % of Total Income Statement: LTM Core Earnings(1) (2) ........................ NM NM 2024 Estimated Earnings (2) ...................... NM NM 2025 Estimated Earnings . . . . . . . . . . . . . . . . . . . . . . . . 97% 3% 2026 Estimated Earnings . . . . . . . . . . . . . . . . . . . . . . . . 88% 12% (1) Core net income excluded extraordinary items, non-recurring items and gains / (losses) on the sale of securities, non-controlling interest and amortization of intangible and goodwill impairment (2) Percentages were considered not meaningful (“NM”) because of William Penn’s net loss during the covered period Financial Impact Analysis. KBW performed a pro forma financial impact analysis that combined projected income statement and balance sheet information of Mid Penn and William Penn. Using (i) closing balance sheet estimates assumed as of June 30, 2025 and 2024, 2025 and 2026 EPS estimates for Mid Penn and William Penn taken from publicly available consensus “street estimates” for Mid Penn as of October 25, 2024 and financial forecasts and projections of William Penn provided by Mid Penn management (which gave effect to the realignment of the William Penn franchise), and (ii) pro forma assumptions (including, without limitation, the cost savings expected to result from the merger as well as certain purchase accounting adjustments and other merger-related adjustments and restructuring charges assumed with respect thereto) provided by Mid Penn management, KBW analyzed the potential financial impact of the merger on certain projected financial results of Mid Penn. This analysis indicated the merger could be accretive to Mid Penn’s estimated 2025 EPS and estimated 2026 EPS and could be dilutive to Mid Penn’s estimated tangible book value per share at closing assumed as of June 30, 2025. Furthermore, the analysis indicated that, pro forma for the merger, each of Mid Penn’s Tier 1 Leverage Ratio, Common Equity Tier 1 Ratio, Tier 1 Capital Ratio and Total Risk-based Capital Ratio at closing assumed as of June 30, 2025 could be higher. For all of the above analysis, the actual results achieved by Mid Penn following the merger may vary from the projected results, and the variations may be material. Mid Penn Dividend Discount Model Analysis. KBW performed a dividend discount model analysis of Mid Penn to estimate a range for the implied equity value of Mid Penn. In this analysis, KBW used publicly available consensus “street estimates” for Mid Penn as of October 25, 2024 and assumed long-term growth rates for Mid Penn provided by Mid Penn management, and KBW assumed discount rates ranging from 11.0% to 15.0%. The range of values was derived by adding (i) the present value of the implied future excess capital available for dividends that Mid Penn could generate over the period from June 30, 2025 through December 31, 2029 as a standalone company, and (ii) the present value of Mid Penn’s implied terminal value at the end of such period. KBW assumed that Mid Penn would maintain a tangible common equity to tangible assets ratio of 8.00% and would retain sufficient earnings to maintain that level. In calculating the terminal value of Mid Penn, KBW applied a range of 9.0x to 11.0x Mid Penn’s estimated 2030 earnings. This dividend discount model analysis resulted in a range of implied values per share of Mid Penn common stock of $26.57 to $34.80. The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of Mid Penn or the pro forma combined entity. William Penn Dividend Discount Model Analysis. KBW performed a dividend discount model analysis of William Penn to estimate a range for the implied equity value of William Penn, taking into account the cost savings expected to result from the merger as well as certain purchase accounting adjustments and other mergerrelated adjustments and restructuring charges assumed with respect thereto. In this analysis, KBW used financial forecasts and projections of William Penn (which gave effect to the realignment of the William Penn franchise) 83
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