Loans and Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2019

Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract]

Type of Loan Portfolio Summarized by the Aggregate Risk Rating

The types of loans in Mid Penn’s portfolio, summarized by the pass rating (net of deferred fees and costs of $554,000 as of March 31, 2019 and $475,000 as of December 31, 2018), and the loans classified as special mention and substandard within Mid Penn’s internal risk rating system as of March 31, 2019 and December 31, 2018, are as follows:

(Dollars in thousands)			Special
March 31, 2019	Pass		Mention		Substandard		Total
Commercial and industrial	$	272,760	$	2,748	$	10,258	$	285,766
Commercial real estate		857,190		2,713		8,595		868,498
Commercial real estate - construction		161,606		—		407		162,013
Lease financing		—		—		—		—
Residential mortgage		250,010		145		2,300		252,455
Home equity		68,354		—		82		68,436
Consumer		9,518		—		—		9,518
	$	1,619,438	$	5,606	$	21,642	$	1,646,686

(Dollars in thousands)			Special
December 31, 2018	Pass		Mention		Substandard		Total
Commercial and industrial	$	276,690	$	2,769	$	7,059	$	286,518
Commercial real estate		850,150		2,432		8,787		861,369
Commercial real estate - construction		141,806		—		367		142,173
Lease financing		53		—		—		53
Residential mortgage		251,151		147		2,245		253,543
Home equity		70,004		—		92		70,096
Consumer		10,315		—		—		10,315
	$	1,600,169	$	5,348	$	18,550	$	1,624,067

Impaired Loans by Loan Portfolio Class

Impaired loans by loan portfolio class as of March 31, 2019 and December 31, 2018 are summarized as follows:

	March 31, 2019						December 31, 2018
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate		1,995		2,342		—		2,007		2,276		—
Commercial real estate - construction		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Residential mortgage		905		951		—		657		811		—
Home equity		29		55		—		30		106		—
Consumer		—		—		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	29	$	29	$	—	$	28	$	28	$	—
Commercial real estate		1,588		1,588		—		1,563		1,563		—
Commercial real estate - construction		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Residential mortgage		1,211		1,211		—		1,208		1,208		—
Home equity		4		4		—		4		4		—
Consumer		—		—		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	205	$	205	$	205	$	4,527	$	4,635	$	500
Commercial real estate		832		832		243		721		721		204
Commercial real estate - construction		367		370		38		367		370		38
Lease financing		—		—		—		—		—		—
Residential mortgage		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	234	$	234	$	205	$	4,555	$	4,663	$	500
Commercial real estate		4,415		4,762		243		4,291		4,560		204
Commercial real estate - construction		367		370		38		367		370		38
Lease financing		—		—		—		—		—		—
Residential mortgage		2,116		2,162		—		1,865		2,019		—
Home equity		33		59		—		34		110		—
Consumer		—		—		—		—		—		—

Average Recorded Investment Of Impaired Loans And Related Interest Income By Loan Portfolio Class

The average recorded investment of impaired loans and related interest income recognized for the three months ended March 31, 2019 and 2018 are summarized as follows:

	Three Months Ended
	March 31, 2019				March 31, 2018
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	—	$	—	$	—	$	—
Commercial real estate		2,001		—		3,506		—
Commercial real estate - construction		—		—		—		—
Lease financing		—		—		—		—
Residential mortgage		858		7		714		—
Home equity		30		—		222		—
Consumer		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	29	$	—	$	17	$	—
Commercial real estate		1,575		—		936		—
Commercial real estate - construction		—		—		—		—
Lease financing		—		—		—		—
Residential mortgage		1,214		—		443		—
Home equity		4		—		—		—
Consumer		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	2,366	$	3	$	4,404	$	—
Commercial real estate		776		—		1,406		—
Commercial real estate - construction		367		—		487		—
Lease financing		—		—		—		—
Residential mortgage		—		—		—		—
Home equity		—		—		—		—
Consumer		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	2,395	$	3	$	4,421	$	—
Commercial real estate		4,352		—		5,848		—
Commercial real estate - construction		367		—		487		—
Lease financing		—		—		—		—
Residential mortgage		2,072		7		1,157		—
Home equity		34		—		222		—
Consumer		—		—		—		—

Non-accrual Loans by Classes of the Loan Portfolio Including Loans Acquired With Credit Deterioration

Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of March 31, 2019 and December 31, 2018 are summarized as follows:

(Dollars in thousands)	March 31, 2019		December 31, 2018
Commercial and industrial	$	234	$	4,555
Commercial real estate		4,415		4,291
Commercial real estate - construction		407		367
Residential mortgage		1,565		1,502
Home equity		34		34
	$	6,655	$	10,749

Loan Portfolio Summarized by the Past Due Status

The classes of the loan portfolio summarized by the past due status as of March 31, 2019 and December 31, 2018 are summarized as follows:

													Loans
(Dollars in thousands)	30-59		60-89		Greater								Receivable >
	Days Past		Days Past		than 90		Total Past						90 Days and
March 31, 2019	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	2	$	1	$	207	$	210	$	285,527	$	285,737	$	2
Commercial real estate		273		1,769		523		2,565		864,345		866,910		—
Commercial real estate - construction		—		—		407		407		161,606		162,013		—
Lease financing		—		—		—		—		—		—		—
Residential mortgage		244		8		339		591		250,653		251,244		—
Home equity		82		—		25		107		68,325		68,432		—
Consumer		76		23		—		99		9,419		9,518		—
Loans acquired with credit deterioration:
Commercial and industrial		24		—		5		29		—		29		—
Commercial real estate		—		—		1,558		1,558		30		1,588		—
Commercial real estate - construction		—		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—		—
Residential mortgage		27		—		974		1,001		210		1,211		—
Home equity		—		—		4		4		—		4		—
Consumer		—		—		—		—		—		—		—
Total	$	728	$	1,801	$	4,042	$	6,571	$	1,640,115	$	1,646,686	$	2

													Loans
(Dollars in thousands)	30-59		60-89		Greater								Receivable >
	Days Past		Days Past		than 90		Total Past						90 Days and
December 31, 2018	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	17	$	—	$	4,527	$	4,544	$	281,946	$	286,490	$	—
Commercial real estate		685		—		458		1,143		858,663		859,806		—
Commercial real estate - construction		—		—		367		367		141,806		142,173		—
Lease financing		—		—		—		—		53		53		—
Residential mortgage		461		—		277		738		251,597		252,335		—
Home equity		166		22		25		213		69,879		70,092		—
Consumer		57		5		—		62		10,253		10,315		—
Loans acquired with credit deterioration:
Commercial and industrial		23		5		—		28		—		28		—
Commercial real estate		29		—		1,534		1,563		—		1,563		—
Commercial real estate - construction		—		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—		—
Residential mortgage		19		57		913		989		219		1,208		—
Home equity		—		—		4		4		—		4		—
Consumer		—		—		—		—		—		—		—
Total	$	1,457	$	89	$	8,105	$	9,651	$	1,614,416	$	1,624,067	$	—

Allowance and Recorded Investment in Financing Receivables

The following tables summarize the allowance and recorded investments in loans receivable.

(Dollars in thousands)
As of, and for the three months ended, March 31, 2019	Commercial and industrial		Commercial real estate			Commercial real estate - construction			Lease financing		Residential mortgage		Home equity			Consumer			Unallocated			Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2019	$	2,391	$	4,703		$	75		$	—	$	453	$	528		$	7		$	240		$	8,397
Charge-offs		—		(11	)		(20	)		—		—		—			(10	)		—			(41	)
Recoveries		1		18			—			—		—		—			2			—			21
Provisions		51		321			26			—		24		(78	)		7			(226	)		125
Ending balance,
March 31, 2019		2,443		5,031			81			—		477		450			6			14			8,502
Individually evaluated for impairment		205		243			38			—		—		—			—			—			486
Ending balance:
collectively evaluated for impairment	$	2,238	$	4,788		$	43		$	—	$	477	$	450		$	6		$	14		$	8,016
Loans receivables:
Ending balance	$	285,766	$	868,498		$	162,013		$	—	$	252,455	$	68,436		$	9,518		$	—		$	1,646,686
Ending balance: individually evaluated for impairment		205		2,827			367			—		905		29			—			—			4,333
Ending balance: acquired with credit deterioration		29		1,588			—			—		1,211		4			—			—			2,832
Ending balance: collectively evaluated for impairment	$	285,532	$	864,083		$	161,646		$	—	$	250,339	$	68,403		$	9,518		$	—		$	1,639,521

(Dollars in thousands)
December 31, 2018	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Ending balance	$	2,391	$	4,703	$	75	$	—	$	453	$	528	$	7	$	240	$	8,397
Ending balance: individually evaluated for impairment		500		204		38		—		—		—		—		—		742
Ending balance: collectively evaluated for impairment	$	1,891	$	4,499	$	37	$	—	$	453	$	528	$	7	$	240	$	7,655
Loans receivable:
Ending balance	$	286,518	$	861,369	$	142,173	$	53	$	253,543	$	70,096	$	10,315	$	—	$	1,624,067
Ending balance: individually evaluated for impairment		4,527		2,728		367		—		811		30		—		—		8,463
Ending balance: acquired with credit deterioration		28		1,563		—		—		1,208		4		—		—		2,803
Ending balance: collectively evaluated for impairment	$	281,963	$	857,078	$	141,806	$	53	$	251,524	$	70,062	$	10,315	$	—	$	1,612,801

(Dollars in thousands)
As of, and for the three months ended, March 31, 2018	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage			Home equity			Consumer			Unallocated			Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2018	$	1,795	$	4,435	$	178	$	—	$	428		$	423		$	3		$	344		$	7,606
Charge-offs		—		—		—		—		(2	)		(76	)		(6	)		—			(84	)
Recoveries		—		17		—		—		—			—			2			—			19
Provisions		182		201		5		—		26			44			5			(338	)		125
Ending balance,
March 31, 2018		1,977		4,653		183		—		452			391			4			6			7,666
Individually evaluated for impairment		265		281		93		—		—			—			—			—			639
Ending balance:
collectively evaluated for impairment	$	1,712	$	4,372	$	90	$	—	$	452		$	391		$	4		$	6		$	7,027
Loans receivables:
Ending balance	$	198,783	$	560,776	$	73,756	$	194	$	123,693		$	45,165		$	4,771		$	—		$	1,007,138
Ending balance: individually evaluated for impairment		4,374		4,977		487		—		669			183			—			—			10,690
Ending balance: acquired with credit deterioration		23		1,443		—		—		689			—			—			—			2,155
Ending balance: collectively evaluated for impairment	$	194,386	$	554,356	$	73,269	$	194	$	122,335		$	44,982		$	4,771		$	—		$	994,293

Troubled Debt Restructurings

The recorded investments in troubled debt restructured loans at March 31, 2019 and December 31, 2018 are as follows:

(Dollars in thousands)	Pre-Modification		Post-Modification
March 31, 2019	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial real estate	$	2,940	$	2,841	$	2,184
Residential mortgage		677		675		509
Home equity		14		14		1
	$	3,631	$	3,530	$	2,694

(Dollars in thousands)	Pre-Modification		Post-Modification
December 31, 2018	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	4,110	$	4,460	$	4,302
Commercial real estate		2,940		2,841		2,201
Residential mortgage		677		675		516
Home equity		14		14		1
	$	7,741	$	7,990	$	7,020

Schedule of Accretion of Purchased Impaired Loan

The following tables provide activity for the accretable yield of acquired impaired loans from the Phoenix Bancorp, Inc. (March 2015), Scottdale (January 2018), and First Priority (July 2018) acquisitions for the three months ended March 31, 2019 and 2018.

(Dollars in thousands)
	Three Months Ended March 31,
	2019			2018
Accretable yield, beginning of period	$	309		$	67
Acquisition of impaired loans		—			305
Accretable yield amortized to interest income		(55	)		(36	)
Accretable yield, end of period	$	254		$	336