Loans and Allowance for Loan and Lease Losses (Tables)

9 Months Ended

Sep. 30, 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 those rated as “pass” (net of deferred fees and costs of $948,000 as of September 30, 2019 and $647,000 as of December 31, 2018), and the loans classified as “special mention” and “substandard” within Mid Penn’s internal risk rating system as of September 30, 2019 and December 31, 2018, are as follows:

(Dollars in thousands)			Special
September 30, 2019	Pass		Mention		Substandard		Total
Commercial and industrial	$	307,083	$	11,068	$	2,249	$	320,400
Commercial real estate		875,155		8,974		7,931		892,060
Commercial real estate - construction		177,111		—		40		177,151
Lease financing		—		—		—		—
Residential mortgage		242,076		56		1,597		243,729
Home equity		69,181		—		59		69,240
Consumer		7,854		—		—		7,854
	$	1,678,460	$	20,098	$	11,876	$	1,710,434

(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 September 30, 2019 and December 31, 2018 are summarized as follows:

	September 30, 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		1,787		2,087		—		2,007		2,276		—
Commercial real estate - construction		40		61		—		—		—		—
Lease financing		—		—		—		—		—		—
Residential mortgage		881		896		—		657		811		—
Home equity		26		27		—		30		106		—
Consumer		—		—		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	5	$	5	$	—	$	28	$	28	$	—
Commercial real estate		1,643		1,643		—		1,563		1,563		—
Commercial real estate - construction		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Residential mortgage		494		494		—		1,208		1,208		—
Home equity		4		4		—		4		4		—
Consumer		—		—		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	—	$	—	$	—	$	4,527	$	4,635	$	500
Commercial real estate		537		578		336		721		721		204
Commercial real estate - construction		—		—		—		367		370		38
Lease financing		—		—		—		—		—		—
Residential mortgage		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	5	$	5	$	—	$	4,555	$	4,663	$	500
Commercial real estate		3,967		4,308		336		4,291		4,560		204
Commercial real estate - construction		40		61		—		367		370		38
Lease financing		—		—		—		—		—		—
Residential mortgage		1,375		1,390		—		1,865		2,019		—
Home equity		30		31		—		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 and nine months ended September 30, 2019 and 2018 are summarized as follows:

	Three Months Ended
	September 30, 2019				September 30, 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		1,917		—		1,872		—
Commercial real estate - construction		40		4		—		—
Lease financing		—		—		—		—
Residential mortgage		889		7		780		11
Home equity		27		—		17		—
Consumer		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	11	$	—	$	24	$	—
Commercial real estate		1,630		—		1,470		7
Commercial real estate - construction		—		—		—		—
Lease financing		—		—		—		—
Residential mortgage		1,055		—		677		—
Home equity		4		—		1		—
Consumer		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	38	$	—	$	4,425	$	—
Commercial real estate		617		—		703		—
Commercial real estate - construction		—		—		367		—
Lease financing		—		—		—		—
Residential mortgage		—		—		—		—
Home equity		—		—		—		—
Consumer		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	49	$	—	$	4,449	$	—
Commercial real estate		4,164		—		4,045		7
Commercial real estate - construction		40		4		367		—
Lease financing		—		—		—		—
Residential mortgage		1,944		7		1,457		11
Home equity		31		—		18		—
Consumer		—		—		—		—

	Nine Months Ended
	September 30, 2019				September 30, 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		2,697		11		3,040		3
Commercial real estate - construction		40		—		—		—
Lease financing		—		—		—		—
Residential mortgage		1,151		21		769		27
Home equity		38		—		148		—
Consumer		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	22	$	—	$	21	$	—
Commercial real estate		1,602		—		1,365		23
Commercial real estate - construction		—		—		—		—
Lease financing		—		—		—		—
Residential mortgage		1,152		—		726		—
Home equity		4		—		—		—
Consumer		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	1,202	$	3	$	4,424	$	—
Commercial real estate		633		—		456		—
Commercial real estate - construction		183		—		367		—
Lease financing		—		—		—		—
Residential mortgage		—		—		—		—
Home equity		—		—		—		—
Consumer		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	1,224	$	3	$	4,445	$	—
Commercial real estate		4,932		11		4,861		26
Commercial real estate - construction		223		—		367		—
Lease financing		—		—		—		—
Residential mortgage		2,303		21		1,495		27
Home equity		42		—		148		—
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 September 30, 2019 and December 31, 2018 are summarized as follows:

(Dollars in thousands)	September 30, 2019		December 31, 2018
Commercial and industrial	$	5	$	4,555
Commercial real estate		3,967		4,291
Commercial real estate - construction		40		367
Residential mortgage		884		1,502
Home equity		30		34
	$	4,926	$	10,749

Loan Portfolio Summarized by the Past Due Status

The classes of the loan portfolio summarized by the past due status as of September 30, 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
September 30, 2019	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	301	$	—	$	—	$	301	$	320,094	$	320,395	$	—
Commercial real estate		230		—		1,745		1,975		888,442		890,417		—
Commercial real estate - construction		—		—		40		40		177,111		177,151		—
Lease financing		—		—		—		—		—		—		—
Residential mortgage		35		87		365		487		242,748		243,235		—
Home equity		—		18		—		18		69,218		69,236		—
Consumer		—		—		—		—		7,854		7,854		—
Loans acquired with credit deterioration:
Commercial and industrial		—		—		5		5		—		5		—
Commercial real estate		—		—		1,612		1,612		31		1,643		—
Commercial real estate - construction		—		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—		—
Residential mortgage		—		17		158		175		319		494		—
Home equity		—		—		—		—		4		4		—
Consumer		—		—		—		—		—		—		—
Total	$	566	$	122	$	3,925	$	4,613	$	1,705,821	$	1,710,434	$	—

													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, September 30, 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,
July 1, 2019	$	2,448		$	5,312		$	45		$	—	$	476		$	482		$	7		$	1		$	8,771
Charge-offs		(12	)		(42	)		—			—		(3	)		—			(9	)		—			(66	)
Recoveries		1			41			—			—		2			1			1			—			46
Provisions		6			544			1			—		(7	)		13			6			2			565
Ending balance,
September 30, 2019	$	2,443		$	5,855		$	46		$	—	$	468		$	496		$	5		$	3		$	9,316
(Dollars in thousands)
As of, and for the nine months ended, September 30, 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		(217	)		(53	)		(40	)		—		(3	)		—			(57	)		—			(370	)
Recoveries		44			74			—			—		2			2			12			—			134
Provisions		225			1,131			11			—		16			(34	)		43			(237	)		1,155
Ending balance,
September 30, 2019		2,443			5,855			46			—		468			496			5			3			9,316
Individually evaluated for impairment		—			336			—			—		—			—			—			—			336
Ending balance:
collectively evaluated for impairment	$	2,443		$	5,519		$	46		$	—	$	468		$	496		$	5		$	3		$	8,980
Loans receivables:
Ending balance	$	320,400		$	892,060		$	177,151		$	—	$	243,729		$	69,240		$	7,854		$	—		$	1,710,434
Ending balance: individually evaluated for impairment		—			2,324			40			—		881			26			—			—			3,271
Ending balance: acquired with credit deterioration		5			1,643			—			—		494			4			—			—			2,146
Ending balance: collectively evaluated for impairment	$	320,395		$	888,093		$	177,111		$	—	$	242,354		$	69,210		$	7,854		$	—		$	1,705,017

(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, September 30, 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,
July 1, 2018	$	2,120		$	4,723		$	146		$	—	$	441		$	420		$	4		$	335		$	8,189
Charge-offs		(12	)		(34	)		—			—		(10	)		—			(11	)		—			(67	)
Recoveries		—			2			—			—		—			—			5			—			7
Provisions		232			130			(12	)		—		38			16			7			(311	)		100
Ending balance,
September 30, 2018	$	2,340		$	4,821		$	134		$	—	$	469		$	436		$	5		$	24		$	8,229
(Dollars in thousands)
As of, and for the nine months ended, September 30, 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		(142	)		(34	)		(40	)		—		(14	)		(167	)		(21	)		—			(418	)
Recoveries		1			807			—			—		—			—			8			—			816
Provisions		686			(387	)		(4	)		—		55			180			15			(320	)		225
Ending balance,
September 30, 2018		2,340			4,821			134			—		469			436			5			24			8,229
Individually evaluated for impairment		489			243			38			—		—			—			—			—			770
Ending balance:
collectively evaluated for impairment	$	1,851		$	4,578		$	96		$	—	$	469		$	436		$	5		$	24		$	7,459
Loans receivables:
Ending balance	$	269,150		$	812,822		$	145,368		$	132	$	255,386		$	73,849		$	10,579		$	—		$	1,567,286
Ending balance: individually evaluated for impairment		4,527			2,890			367			—		832			25			—			—			8,641
Ending balance: acquired with credit deterioration		28			1,456			—			—		1,264			4			—			—			2,752
Ending balance: collectively evaluated for impairment	$	264,595		$	808,476		$	145,001		$	132	$	253,290		$	73,820		$	10,579		$	—		$	1,555,893

Troubled Debt Restructurings

The recorded investments in troubled debt restructured loans at September 30, 2019 and December 31, 2018 are as follows:

(Dollars in thousands)	Pre-Modification		Post-Modification
September 30, 2019	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial real estate	$	2,670	$	2,571	$	1,894
Residential mortgage		677		675		497
	$	3,347	$	3,246	$	2,391

(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 and nine months ended September 30, 2019.

(Dollars in thousands)
	Three Months Ended September 30,
	2019			2018
Accretable yield, beginning of period	$	197		$	300
Acquisition of impaired loans		—			125
Accretable yield amortized to interest income		(55	)		(61	)
Accretable yield, end of period	$	142		$	364

	Nine Months Ended September 30,
	2019			2018
Accretable yield, beginning of period	$	309		$	67
Acquisition of impaired loans		—			430
Accretable yield amortized to interest income		(167	)		(133	)
Accretable yield, end of period	$	142		$	364