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Fair Value Measurement
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
Mid Penn uses estimates of fair value in applying various accounting standards to its consolidated financial statements on either a recurring or non-recurring basis. Fair value is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. Mid Penn groups its assets and liabilities measured at fair value in three hierarchy levels, based on the observability and transparency of the inputs. The fair value hierarchy is as follows:
Level 1 - Inputs that represent quoted prices for identical instruments in active markets.
Level 2 - Inputs that represent quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 - Inputs that are largely unobservable, as little or no market data exists for the instrument being valued.
A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.
There were no transfers of assets between fair value Level 1 and Level 2 of the fair value hierarchy during the three months ended March 31, 2026 or the year ended December 31, 2025.
The following tables illustrate the assets and liabilities measured at fair value on a recurring basis and reported on the Consolidated Balance Sheets:
March 31, 2026
(In thousands)Level 1Level 2Level 3Total
Available-for-sale securities:
U.S. Treasury and U.S. government agencies$— $16,862 $— $16,862 
Mortgage-backed U.S. government agencies— 376,221 — 376,221 
State and political subdivision obligations— 50,854 — 50,854 
Corporate debt securities— 40,193 — 40,193 
Equity securities5,412 — — 5,412 
Loans held-for-sale— 16,554 — 16,554 
Other assets:
Derivative assets— 8,168 — 8,168 
Other liabilities:
Derivative liabilities— 7,820 7,820 
December 31, 2025
(In thousands)Level 1Level 2Level 3Total
Available-for-sale securities:
U.S. Treasury and U.S. government agencies$— $19,066 $— $19,066 
Mortgage-backed U.S. government agencies— 353,397 — 353,397 
State and political subdivision obligations— 3,834 — 3,834 
Corporate debt securities— 40,017 — 40,017 
Equity securities5,446 — — 5,446 
Loans held-for-sale— 3,668 — 3,668 
Other assets:
Derivative assets— 9,007 — 9,007 
Other liabilities:
Derivative liabilities— 8,796 — 8,796 
The valuation methodologies and assumptions used to estimate the fair value for the items in the preceding tables are as follows:
Available-for-sale investment securities - The fair value of equity and debt securities classified as available-for-sale is determined by obtaining quoted market prices on nationally recognized securities exchanges (Level 1), or matrix pricing (Level 2). Matrix pricing is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted market prices for the specific securities, but rather, relying on the securities’ relationship to other benchmark quoted prices.
Equity securities - The fair value of equity securities with readily determinable fair values is recorded on the Consolidated Balance Sheet, with realized and unrealized gains and losses reported in other expense on the Consolidated Statements of Income. These securities consist primarily of publicly traded equity securities and are classified within Level 1 in the fair value hierarchy.
Loans held-for-sale - This category includes mortgage loans held-for-sale that are measured at fair value on a recurring basis. Fair values as of March 31, 2026 were measured as the price that secondary market investors were offering for loans with similar characteristics.
Derivative instruments - Interest rate swaps are measured by alternative pricing sources with reasonable levels of price transparency in markets that are not active. Based on the complex nature of interest rate swap agreements, the markets these instruments trade in are not as active or liquid as those for more mature Level 1 markets. These markets do, however, have comparable, observable inputs in which an alternative pricing source values these assets in order to arrive at a fair market value. These characteristics classify interest rate swap agreements as Level 2.
Mortgage banking derivatives - represent the fair value of mortgage banking derivatives in the form of interest rate locks and forward commitments with secondary market investors and the fair value of interest rate swaps. The fair values of Mid Penn’s interest rate locks, forward commitments and interest rate swaps represent the amounts that would be required to settle the derivative financial instruments at the balance sheet date. These characteristics classify mortgage banking derivatives as Level 3.
Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis. These instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, upon acquisition or when there is evidence of impairment).

The following table illustrates financial instruments measured at fair value on a nonrecurring basis:
March 31, 2026
(In thousands)Level 1Level 2Level 3Total
Individually evaluated loans, net of ACL$— $— $26,846 $26,846 
Foreclosed assets held-for-sale— — 8,420 8,420 
December 31, 2025
(In thousands)Level 1Level 2Level 3Total
Individually evaluated loans, net of ACL$— $— $20,903 $20,903 
Foreclosed assets held-for-sale— — 7,806 7,806 
Net loans - This category consists of loans that were individually evaluated for credit losses, net of the related ACL, and have been classified as Level 3 assets. All of Mid Penn’s individually evaluated loans for 2026 and 2025, whether reporting
a specific allowance allocation or not, are considered collateral-dependent. Mid Penn utilized Level 3 inputs such as independent appraisals of the underlying collateral, which generally includes Level 3 inputs which are not observable. Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses.
Foreclosed assets held-for-sale - Values are based on appraisals that consider the sales prices of property in the proximate vicinity.
The following table presents additional information about the valuation techniques for level 3 assets measured at fair value on a nonrecurring basis:
March 31, 2026
(Dollars in thousands)
Fair Value
Valuation Technique
Significant Unobservable Input
Range of Inputs
Weighted Average
Individually evaluated loans, net of ACL$26,846 
Appraisal of collateral
Appraisal adjustments
8%-100%52.1%
Foreclosed assets held-for-sale
8,420 
Appraisal of collateral
Appraisal adjustments18%-100%42.6%
December 31, 2025
(Dollars in thousands)
Fair Value
Valuation Technique
Significant Unobservable Input
Range of Inputs
Weighted Average
Individually evaluated loans, net of ACL$20,903 Appraisal of collateralAppraisal adjustments8%-100%44.9%
Foreclosed assets held-for-sale
7,806 Appraisal of collateralAppraisal adjustments23%-100%39.8%
The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn's financial instruments as of the periods presented:
March 31, 2026
Carrying
Amount		Estimated Fair Value
(In thousands)Level 1Level 2Level 3Total
Financial instruments - assets
 Cash and cash equivalents $141,190 $141,190 $— $— $141,190 
 Available-for-sale securities484,130 — 484,130 — 484,130 
Held-to-maturity securities340,957 — 314,398 — 314,398 
 Equity securities5,412 5,412 — — 5,412 
 Loans held-for-sale16,554 — 16,554 — 16,554 
Net loans 5,468,835 — — 5,508,561 5,508,561 
 Restricted investment in bank stocks10,081 10,081 — 10,081 
 Accrued interest receivable32,958 32,958 — — 32,958 
 Derivative assets 8,168 — 8,168 — 8,168 
Financial instruments - liabilities
Deposits$5,970,967 $— $5,973,274 $— $5,973,274 
Short-term borrowings31,500 — 31,500 — 31,500 
Long-term debt (1)
141 — 127 — 127 
 Accrued interest payable12,195 12,195 — — 12,195 
 Derivative liabilities7,865 — 7,865 — 7,865 
(1)Long-term debt excludes finance lease obligations.
December 31, 2025
Estimated Fair Value
(In thousands)Carrying
Amount		Level 1Level 2Level 3Total
Financial instruments - assets
Cash and cash equivalents$98,918 $98,918 $— $— $98,918 
Available-for-sale securities416,314 — 416,314 — 416,314 
 Held-to-maturity securities347,285 — 321,702 — 321,702 
   Equity securities5,446 5,446 — — 5,446 
 Loans held-for-sale3,668 — 3,668 — 3,668 
Net loans 4,826,747 — — 4,866,731 4,866,731 
 Restricted investment in bank stocks7,576 7,576 — 7,576 
 Accrued interest receivable29,640 29,640 — — 29,640 
 Derivative assets9,007 — 9,007 — 9,007 
Financial instruments - liabilities
Deposits$5,214,663 $— $5,218,656 $— $5,218,656 
Short-term borrowings20,833 — 20,833 — 20,833 
Long-term debt (1)
20,222 — 20,223 — 20,223 
Subordinated debt— — — — — 
 Accrued interest payable10,942 10,942 — — 10,942 
 Derivative liabilities8,796 — 8,796 — 8,796 
(1)Long-term debt excludes finance lease obligations.
The Bank’s outstanding and unfunded credit commitments and financial standby letters of credit were deemed to have no significant fair value as of March 31, 2026 and December 31, 2025.