Loans and Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2018

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 $515,000 as of March 31, 2018 and $464,000 as of December 31, 2017), and the classified ratings of special mention and substandard within Mid Penn’s internal risk rating system as of March 31, 2018 and December 31, 2017, are as follows:

(Dollars in thousands)			Special
March 31, 2018	Pass		Mention		Substandard		Total
Commercial and industrial	$	192,713	$	793	$	5,277	$	198,783
Commercial real estate		548,118		1,532		11,126		560,776
Commercial real estate - construction		73,092		177		487		73,756
Lease financing		194		—		—		194
Residential mortgage		122,185		153		1,355		123,693
Home equity		44,794		100		271		45,165
Consumer		4,771		—		—		4,771
	$	985,867	$	2,755	$	18,516	$	1,007,138

(Dollars in thousands)			Special
December 31, 2017	Pass		Mention		Substandard		Total
Commercial and industrial	$	182,168	$	453	$	5,412	$	188,033
Commercial real estate		505,397		1,435		8,180		515,012
Commercial real estate - construction		61,667		182		487		62,336
Lease financing		229		—		—		229
Residential mortgage		97,814		157		1,062		99,033
Home equity		41,479		105		309		41,893
Consumer		3,868		—		—		3,868
	$	892,622	$	2,332	$	15,450	$	910,404

Impaired Loans by Loan Portfolio Class

Impaired loans by loan portfolio class as of March 31, 2018 and December 31, 2017 are summarized as follows:

	March 31, 2018						December 31, 2017
(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	$	—	$	12	$	—	$	—	$	13	$	—
Commercial real estate		3,588		4,233		—		3,424		4,056		—
Commercial real estate - construction		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Residential mortgage		669		790		—		760		877		—
Home equity		183		294		—		260		295		—
Consumer		—		—		—		—		—		—

With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	23	$	23	$	—	$	—	$	—	$	—
Commercial real estate		1,443		1,443		—		555		555		—
Commercial real estate - construction		—		—		—		—		—		—
Lease financing		—		—		—		—		—		—
Residential mortgage		689		689		—		306		306		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—

With an allowance recorded:
Commercial and industrial	$	4,374	$	4,460	$	265	$	4,434	$	4,460	$	136
Commercial real estate		1,389		1,577		281		1,423		1,589		293
Commercial real estate - construction		487		492		93		487		492		100
Lease financing		—		—		—		—		—		—
Residential mortgage		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—

Total Impaired Loans:
Commercial and industrial	$	4,397	$	4,495	$	265	$	4,434	$	4,473	$	136
Commercial real estate		6,420		7,253		281		5,402		6,200		293
Commercial real estate - construction		487		492		93		487		492		100
Lease financing		—		—		—		—		—		—
Residential mortgage		1,358		1,479		—		1,066		1,183		—
Home equity		183		294		—		260		295		—

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, 2018 and 2017 are summarized as follows:

	Three Months Ended
	March 31, 2018				March 31, 2017
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	-	$	-	$	2	$	-
Commercial real estate		3,506		-		403		279
Commercial real estate - construction		-		-		617		-
Lease financing		-		-		-		-
Residential mortgage		714		-		864		11
Home equity		222		-		122		2
Consumer		-		-		-		-

With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial		17		-		-		-
Commercial real estate		936		-		831		-
Commercial real estate - construction		-		-		-		-
Lease financing		-		-		-		-
Residential mortgage		443		-		373		-
Home equity		-		-		-		-
Consumer		-		-		-		-

With an allowance recorded:
Commercial and industrial	$	4,404	$	-	$	35	$	-
Commercial real estate		1,406		-		2,676		-
Commercial real estate - construction		487		-		241		-
Lease financing		-		-		-		-
Residential mortgage		-		-		67		-
Home equity		-		-		-		-
Consumer		-		-		-		-

Total Impaired Loans:
Commercial and industrial	$	4,421	$	-	$	37	$	-
Commercial real estate		5,848		-		3,910		279
Commercial real estate - construction		487		-		858		-
Lease financing		-		-		-		-
Residential mortgage		1,157		-		1,304		11
Home equity		222		-		122		2

Non-accrual Loans by Classes of the Loan Portfolio

Nonaccrual loans by loan portfolio class as of March 31, 2018 and December 31, 2017 are summarized as follows:

(Dollars in thousands)	March 31, 2018		December 31, 2017
Commercial and industrial	$	4,397	$	4,434
Commercial real estate		5,914		4,902
Commercial real estate - construction		487		487
Residential mortgage		1,352		492
Home equity		183		260
	$	12,333	$	10,575

Loan Portfolio Summarized by the Past Due Status

The classes of the loan portfolio summarized by the past due status as of March 31, 2018 and December 31, 2017 are summarized as follows:


(Dollars in thousands)	30-59		60-89		Greater
	Days Past		Days Past		than 90		Total Past
March 31, 2018	Due		Due		Days		Due		Current		Total Loans
Commercial and industrial	$	4,378	$	-	$	-	$	4,378	$	194,382	$	198,760
Commercial real estate		544		-		960		1,504		557,829		559,333
Commercial real estate - construction		-		-		487		487		73,269		73,756
Lease financing		-		-		-		-		194		194
Residential mortgage		458		12		651		1,121		121,883		123,004
Home equity		201		-		174		375		44,790		45,165
Consumer		6		9		-		15		4,756		4,771
Loans acquired with credit deterioration:
Commercial and industrial		-		-		23		23		-		23
Commercial real estate		506		-		909		1,415		28		1,443
Commercial real estate - construction		-		-		-		-		-		-
Lease financing		-		-		-		-		-		-
Residential mortgage		183		-		389		572		117		689
Home equity		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	6,276	$	21	$	3,593	$	9,890	$	997,248	$	1,007,138


(Dollars in thousands)	30-59		60-89		Greater
	Days Past		Days Past		than 90		Total Past
December 31, 2017	Due		Due		Days		Due		Current		Total Loans
Commercial and industrial	$	4,439	$	16	$	-	$	4,455	$	183,578	$	188,033
Commercial real estate		-		-		3,669		3,669		510,788		514,457
Commercial real estate - construction		-		-		487		487		61,849		62,336
Lease financing		-		-		-		-		229		229
Residential mortgage		310		467		177		954		97,773		98,727
Home equity		54		98		250		402		41,491		41,893
Consumer		3		-		-		3		3,865		3,868
Loans acquired with credit deterioration:
Commercial and industrial		-		-		-		-		-		-
Commercial real estate		500		-		55		555		-		555
Commercial real estate - construction		-		-		-		-		-		-
Lease financing		-		-		-		-		-		-
Residential mortgage		-		31		193		224		82		306
Home equity		-		-		-		-		-		-
Consumer		-		-		-		-		-		-
Total	$	5,306	$	612	$	4,831	$	10,749	$	899,655	$	910,404

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, 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
Ending balance:
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

(Dollars in thousands)
December 31, 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:
Ending balance	$	1,795	$	4,435	$	178	$	-	$	428	$	423	$	3	$	344	$	7,606
Ending balance:
individually evaluated for impairment		136		293		100		-		-		-		-		-		529
Ending balance:
collectively evaluated for impairment	$	1,659	$	4,142	$	78	$	-	$	428	$	423	$	3	$	344	$	7,077

Loans receivable:
Ending balance	$	188,033	$	515,012	$	62,336	$	229	$	99,033	$	41,893	$	3,868	$	-	$	910,404
Ending balance:
individually evaluated for impairment		4,434		4,847		487		-		760		260		-		-		10,788
Ending balance:
acquired with credit deterioration		-		555		-		-		306		-		-		-		861
Ending balance:
collectively evaluated for impairment	$	183,599	$	509,610	$	61,849	$	229	$	97,967	$	41,633	$	3,868	$	-	$	898,755

(Dollars in thousands)
As of, and for the three months ended, March 31, 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	)		-		-			-		(18	)		-			(6	)		-		(36	)
Recoveries		4			340		-			-		1			-			3			-		348
Provisions		58			52		(43	)		-		8			(15	)		3			62		125
Ending balance,
March 31, 2017		1,630			4,715		101			1		532			364			3			274		7,620
Ending balance:
individually evaluated for impairment		35			957		32			-		67			-			-			-		1,091
Ending balance:
collectively evaluated for impairment	$	1,595		$	3,758	$	69		$	1	$	465		$	364		$	3		$	274	$	6,529

Loans receivables:
Ending balance	$	176,319		$	464,077	$	52,875		$	358	$	99,288		$	38,538		$	2,765		$	-	$	834,220
Ending balance:
individually evaluated for impairment		72			3,220		855			-		946			103			-			-		5,196
Ending balance:
acquired with credit deterioration		-			788		-			-		332			-			-			-		1,120
Ending balance:
collectively evaluated for impairment	$	176,247		$	460,069	$	52,020		$	358	$	98,010		$	38,435		$	2,765		$	-	$	827,904

Troubled Debt Restructurings

The recorded investments in troubled debt restructured loans at March 31, 2018 and December 31, 2017 are as follows:

(Dollars in thousands)	Pre-Modification		Post-Modification
March 31, 2018	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	4,110	$	4,460	$	4,374
Commercial real estate		5,735		5,581		4,535
Residential mortgage		677		675		534
Home equity		14		14		3
	$	10,536	$	10,730	$	9,446

(Dollars in thousands)	Pre-Modification		Post-Modification
December 31, 2017	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	4,110	$	4,460	$	4,434
Commercial real estate		5,735		5,581		4,593
Residential mortgage		691		689		544
	$	10,536	$	10,730	$	9,571

Schedule of Accretion of Purchased Impaired Loan

The following tables provide activity for the accretable yield of acquired impaired loans from both the Phoenix and Scottdale acquisitions for the three months ended March 31, 2018.

(Dollars in thousands)
Accretable yield, January 1, 2018	$	67
Acquisition of impaired loans		305
Accretable yield amortized to interest income		(36	)
Reclassification from nonaccretable difference (a)		-
Accretable yield, March 31, 2018	$	336

(a)

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