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Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Assets Measured at Fair Value on a Recurring Basis

The following tables illustrate the assets measured at fair value on a recurring basis segregated by hierarchy fair value levels.

 

 

 

 

 

 

 

Fair value measurements at March 31, 2022 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

March 31, 2022

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Loans held for sale

 

$

7,474

 

 

 

 

 

 

$

7,482

 

 

$

—

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and U.S. government agencies

 

 

7,326

 

 

 

—

 

 

 

7,326

 

 

 

—

 

Mortgage-backed U.S. government agencies

 

 

114,602

 

 

 

—

 

 

 

114,602

 

 

 

—

 

State and political subdivision obligations

 

 

3,928

 

 

 

—

 

 

 

3,928

 

 

 

—

 

Corporate debt securities

 

 

19,183

 

 

 

—

 

 

 

19,183

 

 

 

—

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

474

 

 

 

474

 

 

 

—

 

 

 

—

 

Interest rate swap agreements

 

 

5,298

 

 

 

—

 

 

 

5,298

 

 

 

 

 

Total

 

$

158,285

 

 

$

474

 

 

$

157,819

 

 

$

—

 

 

 

 

 

 

 

 

Fair value measurements at December 31, 2021 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

December 31, 2021

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Loans held for sale

 

$

11,514

 

 

$

—

 

 

$

11,787

 

 

$

—

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed U.S. government agencies

 

 

49,480

 

 

 

—

 

 

 

49,480

 

 

 

—

 

State and political subdivision obligations

 

 

3,914

 

 

 

—

 

 

 

3,914

 

 

 

—

 

Corporate debt securities

 

 

9,468

 

 

 

—

 

 

 

9,468

 

 

 

—

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

500

 

 

 

500

 

 

 

—

 

 

 

—

 

Interest rate swap agreements

 

 

629

 

 

 

—

 

 

 

629

 

 

 

—

 

Mortgage banking derivative assets

 

 

88

 

 

 

—

 

 

 

88

 

 

 

—

 

Total

 

$

75,593

 

 

$

500

 

 

$

75,366

 

 

$

—

 
Fair Value Measurements, Nonrecurring

The following tables illustrate the assets measured at fair value on a nonrecurring basis segregated by hierarchy fair value levels.

 

 

 

 

 

 

 

Fair value measurements at March 31, 2022 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

March 31, 2022

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Impaired Loans

 

$

690

 

 

$

—

 

 

$

—

 

 

$

690

 

 

 

 

 

 

 

 

 

Fair value measurements at December 31, 2021 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

December 31, 2021

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Impaired Loans

 

$

508

 

 

$

—

 

 

$

—

 

 

$

508

 
Fair Value Measurement Inputs and Valuation Techniques

 

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Mid Penn has utilized Level 3 inputs to determine the fair value.

 

(Dollars in thousands)

 

Quantitative Information about Level 3 Fair Value Measurements

 

March 31, 2022

 

Fair Value Estimate

 

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average

 

Impaired Loans

 

$

690

 

 

Appraisal of collateral (a), (b)

 

Appraisal adjustments (b)

 

2% - 73%

 

24%

 

 

(Dollars in thousands)

 

Quantitative Information about Level 3 Fair Value Measurements

 

December 31, 2021

 

Fair Value Estimate

 

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average

 

Impaired Loans

 

$

508

 

 

Appraisal of collateral (a), (b)

 

Appraisal adjustments (b)

 

21% - 69%

 

30%

 

 

 

(a)

Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable.

 

(b)

Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.  Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received, or age of the appraisal.

 
Fair Value, by Balance Sheet Grouping

The following table summarizes the carrying value and fair value of financial instruments at March 31, 2022 and December 31, 2021.

 

(Dollars in thousands)

March 31, 2022

 

 

December 31, 2021

 

 

Carrying

 

 

Fair

 

 

Carrying

 

 

Fair

 

 

Value

 

 

Value

 

 

Value

 

 

Value

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

758,431

 

 

$

758,431

 

 

$

913,572

 

 

$

913,572

 

Available-for-sale investment securities

 

145,039

 

 

 

145,039

 

 

 

62,862

 

 

 

62,862

 

Held-to-maturity investment securities

 

363,145

 

 

 

343,023

 

 

 

329,257

 

 

 

330,626

 

Equity securities

 

474

 

 

 

474

 

 

 

500

 

 

 

500

 

Loans held for sale

 

7,474

 

 

 

7,482

 

 

 

11,514

 

 

 

11,787

 

Net loans and leases

 

3,106,384

 

 

 

3,103,333

 

 

 

3,089,799

 

 

 

3,118,416

 

Restricted investment in bank stocks

 

7,637

 

 

 

7,637

 

 

 

9,134

 

 

 

9,134

 

Accrued interest receivable

 

11,584

 

 

 

11,584

 

 

 

10,779

 

 

 

10,779

 

Interest rate swap agreements

 

5,298

 

 

 

5,298

 

 

 

629

 

 

 

629

 

Mortgage banking derivative assets

 

—

 

 

 

—

 

 

 

88

 

 

 

88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

3,989,037

 

 

$

3,983,980

 

 

$

4,002,016

 

 

$

4,046,217

 

Long-term debt (a)

 

71,323

 

 

 

70,799

 

 

 

77,890

 

 

 

77,455

 

Subordinated debt

 

74,134

 

 

 

71,796

 

 

 

74,274

 

 

 

74,553

 

Accrued interest payable

 

2,067

 

 

 

2,067

 

 

 

1,791

 

 

 

1,791

 

Mortgage banking derivative liabilities

 

160

 

 

 

160

 

 

 

—

 

 

 

—

 

 

(a)

Long-term debt excludes finance lease obligations.
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn’s financial instruments as of March 31, 2022 and December 31, 2021.  Carrying values approximate fair values for cash and cash equivalents, restricted investment in bank stocks, accrued interest receivable and payable, and short-term borrowings.  Other than cash and cash equivalents, which are considered Level 1 Inputs and mortgage servicing rights, which are Level 3 Inputs, these instruments are Level 2 Inputs. These tables exclude financial instruments for which the carrying amount approximates fair value, not previously disclosed.

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in Active Markets

 

 

 

 

 

Significant

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

for Identical Assets

 

 

Significant Other

 

 

Unobservable

 

 

 

Carrying

 

 

 

 

 

 

or Liabilities

 

 

Observable Inputs

 

 

Inputs

 

March 31, 2022

 

Amount

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Financial instruments - assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity investment

   securities

 

$

363,145

 

 

$

343,023

 

 

$

—

 

 

$

343,023

 

 

$

—

 

Loans held for sale

 

 

7,474

 

 

 

7,482

 

 

 

—

 

 

 

7,482

 

 

 

—

 

Net loans and leases

 

 

3,106,384

 

 

 

3,103,333

 

 

 

—

 

 

 

—

 

 

 

3,103,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments -

   liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

3,989,037

 

 

$

3,983,980

 

 

$

—

 

 

$

3,983,980

 

 

$

—

 

Long-term debt (a)

 

 

71,323

 

 

 

70,799

 

 

 

—

 

 

 

70,799

 

 

 

—

 

Subordinated debt

 

 

74,134

 

 

 

71,796

 

 

 

—

 

 

 

71,796

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in Active Markets

 

 

 

 

 

Significant

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

for Identical Assets

 

 

Significant Other

 

 

Unobservable

 

 

 

Carrying

 

 

 

 

 

 

or Liabilities

 

 

Observable Inputs

 

 

Inputs

 

December 31, 2021

 

Amount

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Financial instruments - assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity investment

   securities

 

$

329,257

 

 

$

330,626

 

 

$

—

 

 

$

330,626

 

 

$

—

 

Loans held for sale

 

 

11,514

 

 

 

11,787

 

 

 

—

 

 

 

11,787

 

 

 

—

 

Net loans and leases

 

 

3,089,799

 

 

 

3,118,416

 

 

 

—

 

 

 

—

 

 

 

3,118,416

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments -

   liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

4,002,016

 

 

$

4,046,217

 

 

$

—

 

 

$

4,046,217

 

 

$

—

 

Long-term debt (a)

 

 

77,890

 

 

 

77,455

 

 

 

—

 

 

 

77,455

 

 

 

—

 

Subordinated debt

 

 

74,274

 

 

 

74,553

 

 

 

—

 

 

 

74,553

 

 

 

—

 

 

 

 

(a)

Long-term debt excludes finance lease obligations.