Loans and Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2022

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

Type of Loan Portfolio Summarized by the Aggregate Risk Rating

As of March 31, 2022 and December 31, 2021, the types of loans in Mid Penn’s portfolio, summarized using Mid Penn’s internal risk rating system between those rated “pass” (net of deferred fees and costs of $3,619,000 as of March 31, 2022 and $6,264,000 as of December 31, 2021), which comprise the vast majority of the portfolio, and those classified as “special mention” and “substandard”, are as follows:

(Dollars in thousands)			Special
March 31, 2022	Pass		Mention		Substandard		Total
Commercial and industrial	$	572,596	$	10,899	$	2,949	$	586,444
Commercial real estate		1,672,461		20,770		29,437		1,722,668
Commercial real estate - construction		380,910		—		1,221		382,131
Residential mortgage		301,442		317		3,552		305,311
Home equity		112,133		681		705		113,519
Consumer		11,458		—		—		11,458
	$	3,051,000	$	32,667	$	37,864	$	3,121,531

(Dollars in thousands)			Special
December 31, 2021	Pass		Mention		Substandard		Total
Commercial and industrial	$	606,484	$	10,321	$	2,757	$	619,562
Commercial real estate		1,601,196		35,508		31,438		1,668,142
Commercial real estate - construction		371,337		—		1,397		372,734
Residential mortgage		319,862		294		3,067		323,223
Home equity		106,853		534		2,919		110,306
Consumer		10,429		—		—		10,429
	$	3,016,161	$	46,657	$	41,578	$	3,104,396

Impaired Loans by Loan Portfolio Class

Impaired loans by loan portfolio class as of March 31, 2022 and December 31, 2021 are summarized as follows:

	March 31, 2022						December 31, 2021
(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	$	—	$	—	$	—	$	—	$	31	$	—
Commercial real estate		821		1,213		—		854		1,243		—
Commercial real estate - construction		—		5		—		22		27		—
Residential mortgage		1,338		1,377		—		1,259		1,295		—
Home equity		99		99		—		2,377		2,377		—
Consumer		—		—		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate		2,109		2,826		—		2,231		2,909		—
Commercial real estate - construction		1,221		1,463		—		1,196		1,469		—
Residential mortgage		1,285		1,863		—		1,362		1,847		—
Home equity		85		107		—		86		111		—
Consumer		—		—		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	523	$	554	$	75	$	308	$	339	$	67
Commercial real estate		280		345		114		287		359		121
Commercial real estate - construction		—		—		—		—		—		—
Residential mortgage		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	523	$	554	$	75	$	308	$	370	$	67
Commercial real estate		3,210		4,384		114		3,372		4,511		121
Commercial real estate - construction		1,221		1,468		—		1,218		1,496		—
Residential mortgage		2,623		3,240		—		2,621		3,142		—
Home equity		184		206		—		2,463		2,488		—
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, 2022 and 2021 are summarized as follows:

	Three Months Ended
	March 31, 2022				March 31, 2021
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	—	$	—	$	753	$	—
Commercial real estate		838		—		4,405		—
Commercial real estate - construction		11		—		31		—
Residential mortgage		1,346		6		787		8
Home equity		1,237		84		2,350		—
Consumer		—		—		—		—
With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	—	$	—	$	—	$	—
Commercial real estate		2,186		—		1,414		—
Commercial real estate - construction		1,205		—		—		—
Residential mortgage		1,335		—		317		—
Home equity		85		—		—		—
Consumer		—		—		—		—
With an allowance recorded:
Commercial and industrial	$	528	$	—	$	157	$	—
Commercial real estate		283		—		880		—
Commercial real estate - construction		—		—		—		—
Residential mortgage		—		—		—		—
Home equity		—		—		—		—
Consumer		—		—		—		—
Total Impaired Loans:
Commercial and industrial	$	528	$	—	$	910	$	—
Commercial real estate		3,307		—		6,699		—
Commercial real estate - construction		1,216		—		31		—
Residential mortgage		2,681		6		1,104		8
Home equity		1,322		84		2,350		—
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, 2022 and December 31, 2021 are summarized as follows:

(Dollars in thousands)	March 31, 2022		December 31, 2021
Commercial and industrial	$	523	$	308
Commercial real estate		3,210		3,372
Commercial real estate - construction		1,221		1,218
Residential mortgage		2,143		2,186
Home equity		410		2,463
	$	7,507	$	9,547

Loan Portfolio Summarized by the Past Due Status

The classes of the loan portfolio summarized by the past due status as of March 31, 2022 and December 31, 2021 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, 2022	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	1,053	$	220	$	436	$	1,709	$	584,735	$	586,444	$	133
Commercial real estate		315		40		679		1,034		1,719,525		1,720,559		—
Commercial real estate - construction		220		—		—		220		380,690		380,910		—
Residential mortgage		1,218		148		876		2,242		301,784		304,026		—
Home equity		829		—		255		1,084		112,350		113,434		—
Consumer		12		—		—		12		11,446		11,458		—
Loans acquired with credit deterioration:
Commercial and industrial		—		—		—		—		—		—		—
Commercial real estate		18		—		1,532		1,550		559		2,109		—
Commercial real estate - construction		—		—		—		—		1,221		1,221		—
Residential mortgage		166		—		421		587		698		1,285		—
Home equity		14		—		56		70		15		85		—
Consumer		—		—		—		—		—		—		—
Total	$	3,845	$	408	$	4,255	$	8,508	$	3,113,023	$	3,121,531	$	133

													Loans
(Dollars in thousands)	30-59		60-89		Greater								Receivable >
	Days Past		Days Past		than 90		Total Past						90 Days and
December 31, 2021	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	1,378	$	62	$	404	$	1,844	$	617,718	$	619,562	$	96
Commercial real estate		32		55		769		856		1,665,055		1,665,911		—
Commercial real estate - construction		—		—		205		205		371,333		371,538		205
Residential mortgage		1,246		205		1,002		2,453		319,408		321,861		212
Home equity		403		—		2,377		2,780		107,440		110,220		—
Consumer		6		2		2		10		10,419		10,429		2
Loans acquired with credit deterioration:
Commercial and industrial		—		—		—		—		—		—		—
Commercial real estate		—		3		1,628		1,631		600		2,231		—
Commercial real estate - construction		—		—		—		—		1,196		1,196		—
Residential mortgage		54		—		818		872		490		1,362		—
Home equity		—		—		—		—		86		86		—
Consumer		—		—		—		—		—		—		—
Total	$	3,119	$	327	$	7,205	$	10,651	$	3,093,745	$	3,104,396	$	515

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, 2022	Commercial and industrial		Commercial real estate		Commercial real estate - construction			Residential mortgage		Home equity		Consumer			Unallocated			Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2022	$	3,439	$	9,415	$	38		$	459	$	560	$	2		$	684		$	14,597
Charge-offs		—		—		—			—		—		(57	)		—			(57	)
Recoveries		13		65		24			—		1		4			—			107
Provisions (credits)		359		511		(21	)		24		1		53			(427	)		500
Ending balance,
March 31, 2022		3,811		9,991		41			483		562		2			257			15,147
Individually evaluated for impairment		75		114		—			—		—		—			—			189
Ending balance:
Collectively evaluated for impairment	$	3,736	$	9,877	$	41		$	483	$	562	$	2		$	257		$	14,958
Loans receivables:
Ending balance	$	586,444	$	1,722,668	$	382,131		$	305,311	$	113,519	$	11,458		$	—		$	3,121,531
Ending balance: individually evaluated for impairment		523		1,101		—			1,338		99		—			—			3,061
Ending balance: acquired with credit deterioration		—		2,109		1,221			1,285		85		—			—			4,700
Ending balance: collectively evaluated for impairment	$	585,921	$	1,719,458	$	380,910		$	302,688	$	113,335	$	11,458		$	—		$	3,113,770

(Dollars in thousands)
December 31, 2021	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Ending balance	$	3,439	$	9,415	$	38	$	459	$	560	$	2	$	684	$	14,597
Ending balance: individually evaluated for impairment		67		121		—		—		—		—		—		188
Ending balance: collectively evaluated for impairment	$	3,372	$	9,294	$	38	$	459	$	560	$	2	$	684	$	14,409
Loans receivable:
Ending balance	$	619,562	$	1,668,142	$	372,734	$	323,223	$	110,306	$	10,429	$	—	$	3,104,396
Ending balance: individually evaluated for impairment		308		1,141		22		1,259		2,377		—		—		5,107
Ending balance: acquired with credit deterioration		—		2,231		1,196		1,362		86		—		—		4,875
Ending balance: collectively evaluated for impairment	$	619,254	$	1,664,770	$	371,516	$	320,602	$	107,843	$	10,429	$	—	$	3,094,414

(Dollars in thousands)
As of, and for the three months ended, March 31, 2021	Commercial and industrial			Commercial real estate		Commercial real estate - construction			Residential mortgage			Home equity		Consumer			Unallocated			Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2021	$	3,066		$	8,655	$	134		$	429		$	507	$	1		$	590		$	13,382
Charge-offs		(859	)		—		—			(3	)		—		(3	)		—			(865	)
Recoveries		1			56		—			9			—		8			—			74
Provisions (credits)		780			233		(12	)		3			21		(5	)		(20	)		1,000
Ending balance,
March 31, 2021		2,988			8,944		122			438			528		1			570			13,591
Individually evaluated for impairment		68			263		—			—			—		—			—			331
Ending balance:
collectively evaluated for impairment	$	2,920		$	8,681	$	122		$	438		$	528	$	1		$	570		$	13,260
Loans receivables:
Ending balance	$	964,045		$	1,135,660	$	264,945		$	197,788		$	75,423	$	8,375		$	—		$	2,646,236
Ending balance: individually evaluated for impairment		368			1,469		30			758			2,334		—			—			4,959
Ending balance: acquired with credit deterioration		—			1,408		—			309			—		—			—			1,717
Ending balance: collectively evaluated for impairment	$	963,677		$	1,132,783	$	264,915		$	196,721		$	73,089	$	8,375		$	—		$	2,639,560

Troubled Debt Restructurings

The recorded investments in troubled debt restructured loans at March 31, 2022 and December 31, 2021 are as follows:

(Dollars in thousands)	Pre-Modification		Post-Modification
March 31, 2022	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial real estate	$	1,213	$	1,115	$	309
Residential mortgage		647		645		465
	$	1,860	$	1,760	$	774

(Dollars in thousands)	Pre-Modification		Post-Modification
December 31, 2021	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	8	$	8	$	5
Commercial real estate		1,214		1,115		320
Commercial real estate - construction		40		40		22
Residential mortgage		647		645		472
	$	1,909	$	1,808	$	819

Schedule of Accretion of Purchased Impaired Loan

The following tables provide activity for the accretable yield of acquired impaired loans from the Phoenix (March 2015), Scottdale (January 2018), First Priority (July 2018), and Riverview (November 2021) acquisitions for the three months ended March 31, 2022 and 2021.

(Dollars in thousands)
	Three Months Ended March 31,
	2022			2021
Accretable yield, beginning of period	$	580		$	40
Accretable yield amortized to interest income		(81	)		—
Accretable yield, end of period	$	499		$	40