Loans and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2017

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

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The classes of the loan portfolio, summarized by the pass rating (net of deferred fees and costs of $435,000 as of June 30, 2017 and $196,000 as of December 31, 2016), and the classified ratings of special mention, substandard, and doubtful within Mid Penn’s internal risk rating system as of June 30, 2017 and December 31, 2016, are as follows:

(Dollars in thousands)			Special
June 30, 2017	Pass		Mention		Substandard		Doubtful		Total
Commercial and industrial	$	175,700	$	4,385	$	1,283	$	-	$	181,368
Commercial real estate		473,078		1,757		7,306		-		482,141
Commercial real estate - construction		52,543		191		571		-		53,305
Lease financing		307		-		-		-		307
Residential mortgage		101,186		102		1,349		-		102,637
Home equity		38,154		124		393		-		38,671
Consumer		3,878		-		-		-		3,878
	$	844,846	$	6,559	$	10,902	$	-	$	862,307

(Dollars in thousands)			Special
December 31, 2016	Pass		Mention		Substandard		Doubtful		Total
Commercial and industrial	$	170,780	$	937	$	801	$	-	$	172,518
Commercial real estate		437,592		1,683		7,249		-		446,524
Commercial real estate - construction		52,888		202		1,286		-		54,376
Lease financing		425		-		-		-		425
Residential mortgage		97,994		107		1,356		-		99,457
Home equity		37,242		142		224		-		37,608
Consumer		3,016		-		-		-		3,016
	$	799,937	$	3,071	$	10,916	$	-	$	813,924

Impaired Loans by Loan Portfolio Class

Impaired loans by loan portfolio class as of June 30, 2017 and December 31, 2016 are summarized as follows:

	June 30, 2017						December 31, 2016
(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	$	-	$	18	$	-	$	4	$	9	$	-
Commercial real estate:
Commercial real estate		900		1,390		-		726		1,792		-
Acquired with credit deterioration		573		573		-		842		842		-
Commercial real estate - construction		331		334				618		618
Residential mortgage:
Residential mortgage		902		931		-		848		882		-
Acquired with credit deterioration		324		324		-		389		389		-
Home equity		327		369		-		111		129		-

With an allowance recorded:
Commercial and industrial	$	-	$	-	$	-	$	56	$	62	$	6
Commercial real estate		2,751		2,915		893		2,520		2,646		711
Commercial real estate - construction		240		242		70		242		242		72
Residential mortgage		66		68		66		68		68		68
Home equity		-		-		-		29		49		1

Total Impaired Loans:
Commercial and industrial	$	-	$	18	$	-	$	60	$	71	$	6
Commercial real estate		4,224		4,878		893		4,088		5,280		711
Commercial real estate - construction		571		576		70		860		860		72
Residential mortgage		1,292		1,323		66		1,305		1,339		68
Home equity		327		369		-		140		178		1

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 six months ended June 30, 2017 and 2016 are summarized as follows:

	Three Months Ended
	June 30, 2017				June 30, 2016
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	36	$	-	$	11	$	-
Commercial real estate:
Commercial real estate		644		-		960		-
Acquired with credit deterioration		644		110		943		-
Commercial real estate - construction		473		-		-		-
Lease financing		-
Residential mortgage:
Residential mortgage		860		7		831		7
Acquired with credit deterioration		326		2		377
Home equity:						66		-
Home equity		90		-		-		-
Acquired with credit deterioration		-		-		-		-
Consumer		-		-		-		-

With an allowance recorded:
Commercial and industrial	$	-	$	-	$	59	$	-
Commercial real estate		2,792		-		2,201		-
Commercial real estate - construction		240		-		-		-
Lease financing		-		-		-		-
Residential mortgage		66		-		-		-
Home equity		-		-		17		-
Consumer		-		-		-		-

Total Impaired Loans:
Commercial and industrial	$	36	$	-	$	70	$	-
Commercial real estate		4,080		110		4,104		-
Commercial real estate - construction		713		-		-		-
Lease financing		-		-		-		-
Residential mortgage		1,252		9		1,208		7
Home equity		90		-		83		-

	Six Months Ended
	June 30, 2017				June 30, 2016
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	18	$	-	$	14	$	-
Commercial real estate:
Commercial real estate		524		279		1,001		-
Acquired with credit deterioration		738		110		934		-
Commercial real estate - construction		313		-		-		-
Lease financing		-		-		-		-
Residential mortgage:
Residential mortgage		843		18		777		9
Acquired with credit deterioration		350		-		375		4
Home equity		101		2		53		-
Consumer		-

With an allowance recorded:
Commercial and industrial	$	-	$	-	$	61	$	-
Commercial real estate		2,660		-		1,851		-
Commercial real estate - construction		144		-		-		-
Lease financing		-		-		-		-
Residential mortgage		40		-		-		-
Home equity		-		-		19		-
Consumer		-		-		-		-

Total Impaired Loans:
Commercial and industrial	$	18	$	-	$	75	$	-
Commercial real estate		3,922		389		3,786		-
Commercial real estate - construction		457		-		-		-
Lease financing		-		-		-		-
Residential mortgage		1,233		18		1,152		13
Home equity		101		2		72		-

Non-accrual Loans by Classes of the Loan Portfolio

Nonaccrual loans by loan portfolio class as of June 30, 2017 and December 31, 2016 are summarized as follows:

(Dollars in thousands)	June 30, 2017		December 31, 2016
Commercial and industrial	$	-	$	4
Commercial real estate		3,630		2,939
Commercial real estate - construction		571		860
Residential mortgage		690		715
Home equity		327		140
	$	5,218	$	4,658

Loan Portfolio Summarized by the Past Due Status

The classes of the loan portfolio summarized by the past due status as of June 30, 2017 and December 31, 2016 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
June 30, 2017	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	101	$	4,083	$	-	$	4,184	$	177,184	$	181,368	$	-
Commercial real estate:
Commercial real estate		250		43		2,502		2,795		478,773		481,568		-
Acquired with credit deterioration		516		-		57		573		-		573		57
Commercial real estate - construction		371		120		451		942		52,363		53,305		-
Lease financing		-		-		-		-		307		307		-
Residential mortgage:
Residential mortgage		174		-		299		473		101,840		102,313		-
Acquired with credit deterioration		32		-		226		258		66		324		-
Home equity		13		-		298		311		38,360		38,671		-
Consumer		-		-		-		-		3,878		3,878		-
Total	$	1,457	$	4,246	$	3,833	$	9,536	$	852,771	$	862,307	$	57

													Loans
(Dollars in thousands)	30-59		60-89		Greater								Receivable >
	Days Past		Days Past		than 90		Total Past						90 Days and
December 31, 2016	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	164	$	12	$	4	$	180	$	172,338	$	172,518	$	-
Commercial real estate:
Commercial real estate		475		-		1,004		1,479		444,203		445,682		-
Acquired with credit deterioration		-		-		59		59		783		842		59
Commercial real estate - construction		-		404		84		488		53,888		54,376		-
Lease financing		-		-		-		-		425		425		-
Residential mortgage:
Residential mortgage		548		124		237		909		98,159		99,068		-
Acquired with credit deterioration		-		-		238		238		151		389		-
Home equity		33		13		125		171		37,437		37,608		-
Consumer		-		-		-		-		3,016		3,016		-
Total	$	1,220	$	553	$	1,751	$	3,524	$	810,400	$	813,924	$	59

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, June 30, 2017	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,
April 1, 2017	$	1,630		$	4,715		$	101	$	1	$	532	$	364	$	3		$	274		$	7,620
Charge-offs		-			(30	)		-		-		-		-		(10	)		-			(40	)
Recoveries		3			22			-		-		2		5		1			-			33
Provisions		(5	)		274			39		-		5		35		10			(258	)		100
Ending balance,
June 30, 2017	$	1,628		$	4,981		$	140	$	1	$	539	$	404	$	4		$	16		$	7,713

(Dollars in thousands)
As of, and for the six months ended, June 30, 2017	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, 2017	$	1,580		$	4,323		$	144		$	1	$	541		$	379	$	3		$	212		$	7,183
Charge-offs		(12	)		(30	)		-			-		(18	)		-		(16	)		-			(76	)
Recoveries		7			361			-			-		4			5		4			-			381
Provisions		53			327			(4	)		-		12			20		13			(196	)		225
Ending balance,
June 30, 2017		1,628			4,981			140			1		539			404		4			16			7,713
Ending balance:
individually evaluated for impairment		-			893			70			-		66			-		-			-			1,029
Ending balance:
collectively evaluated for impairment	$	1,628		$	4,088		$	70		$	1	$	473		$	404	$	4		$	16		$	6,684

Loans receivables:
Ending balance	$	181,368		$	482,141		$	53,305		$	307	$	102,637		$	38,671	$	3,878		$	-		$	862,307
Ending balance:
individually evaluated for impairment		-			3,651			571			-		968			327		-			-			5,517
Ending balance:
acquired with credit deterioration		-			573			-			-		324			-		-			-			897
Ending balance:
collectively evaluated for impairment	$	181,368		$	477,917		$	52,734		$	307	$	101,345		$	38,344	$	3,878		$	-		$	855,893

(Dollars in thousands)
As of, and for the three months ended, June 30, 2016	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,
April 1, 2016	$	1,427		$	3,777		$	119	$	1	$	516		$	303		$	9		$	287	$	6,439
Charge-offs		-			(54	)		-		-		-			(25	)		(7	)		-		(86	)
Recoveries		1			136			-		-		25			-			2			-		164
Provisions		(56	)		382			1		-		(20	)		47			5			36		395
Ending balance,
June 30, 2016	$	1,372		$	4,241		$	120	$	1	$	521		$	325		$	9		$	323	$	6,912

(Dollars in thousands)
As of, and for the six months ended, June 30, 2016	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, 2016	$	1,393		$	3,552		$	153		$	1	$	534		$	317		$	12		$	206	$	6,168
Charge-offs		-			(150	)		-			-		-			(25	)		(10	)		-		(185	)
Recoveries		2			161			-			-		25			-			6			-		194
Provisions		(23	)		678			(33	)		-		(38	)		33			1			117		735
Ending balance,
June 30, 2016		1,372			4,241			120			1		521			325			9			323		6,912
Ending balance:
individually evaluated for impairment		3			769			-			-		-			2			-			-		774
Ending balance:
collectively evaluated for impairment	$	1,369		$	3,472		$	120		$	1	$	521		$	323		$	9		$	323	$	6,138

Loans receivables:
Ending balance	$	160,278		$	410,786		$	56,074		$	565	$	103,822		$	34,579		$	3,049		$	-	$	769,153
Ending balance:
individually evaluated for impairment		68			3,657			-			-		824			81			-			-		4,630
Ending balance:
acquired with credit deterioration		-			951			-			-		370			-			-			-		1,321
Ending balance:
collectively evaluated for impairment	$	160,210		$	406,178		$	56,074		$	565	$	102,628		$	34,498		$	3,049		$	-	$	763,202

(Dollars in thousands)
December 31, 2016	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	$	1,580	$	4,323	$	144	$	1	$	541	$	379	$	3	$	212	$	7,183
Ending balance:
individually evaluated for impairment		6		711		72		-		68		1		-		-		858
Ending balance:
collectively evaluated for impairment	$	1,574	$	3,612	$	72	$	1	$	473	$	378	$	3	$	212	$	6,325

Loans receivable:
Ending balance	$	172,518	$	446,524	$	54,376	$	425	$	99,457	$	37,608	$	3,016	$	-	$	813,924
Ending balance:
individually evaluated for impairment		60		3,246		860		-		916		140		-		-		5,222
Ending balance:
acquired with credit deterioration		-		842		-		-		389		-		-		-		1,231
Ending balance:
collectively evaluated for impairment	$	172,458	$	442,436	$	53,516	$	425	$	98,152	$	37,468	$	3,016	$	-	$	807,471

Troubled Debt Restructurings

The recorded investments in troubled debt restructured loans at June 30, 2017 and December 31, 2016 are as follows:

(Dollars in thousands)	Pre-Modification		Post-Modification
June 30, 2017	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial real estate	$	3,457	$	4,003	$	2,407
Residential mortgage		759		743		623
	$	4,216	$	4,746	$	3,030

(Dollars in thousands)	Pre-Modification		Post-Modification
December 31, 2016	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	40	$	35	$	5
Commercial real estate		4,569		4,031		2,871
Residential mortgage		759		757		639
	$	5,368	$	4,823	$	3,515

Schedule of Accretion of Purchased Impaired Loan

The following tables provide activity for the accretable yield of acquired impaired loans for the three and six months ended June 30, 2017.

(Dollars in thousands)
Accretable yield, April 1, 2017	$	80
Accretable yield amortized to interest income		(12	)
Reclassification from nonaccretable difference (a)		-
Accretable yield, June 30, 2017	$	68

(Dollars in thousands)

Accretable yield, January 1, 2017	$	67
Accretable yield amortized to interest income		(22	)
Reclassification from nonaccretable difference (a)		23
Accretable yield, June 30, 2017	$	68

(a)

Reclassification from non-accretable difference represents an increase to the estimated cash flows to be collected on the underlying portfolio.