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Fair Value Measurements (Tables) | 9 Months Ended
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Sep. 30, 2019
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 September 30, 2019 using: |
(Dollars in thousands) |  | Total carrying value at |  |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
Assets: |  | September 30, 2019 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | $ | 32,533 |  |  | $ | — |  |  | $ | 32,533 |  |  | $ | — |
Mortgage-backed U.S. government agencies |  |  | 16,511 |  |  |  | — |  |  |  | 16,511 |  |  |  | — |
State and political subdivision obligations |  |  | 1,055 |  |  |  | — |  |  |  | 1,055 |  |  |  | — |
Corporate debt securities |  |  | 2,320 |  |  |  | — |  |  |  | 2,320 |  |  |  | — |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 509 |  |  |  | 509 |  |  |  | — |  |  |  | — |
Total |  | $ | 52,928 |  |  | $ | 509 |  |  | $ | 52,419 |  |  | $ | — |
|  |  |  |  |  | Fair value measurements at December 31, 2018 using: |
(Dollars in thousands) |  | Total carrying value at |  |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
Assets: |  | December 31, 2018 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | $ | 41,572 |  |  | $ | — |  |  | $ | 41,572 |  |  | $ | — |
Mortgage-backed U.S. government agencies |  |  | 38,849 |  |  |  | — |  |  |  | 38,849 |  |  |  | — |
State and political subdivision obligations |  |  | 29,256 |  |  |  | — |  |  |  | 29,256 |  |  |  | — |
Corporate debt securities |  |  | 2,246 |  |  |  | — |  |  |  | 2,246 |  |  |  | — |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  |  | 492 |  |  |  | 492 |  |  |  | — |  |  |  | — |
Total |  | $ | 112,415 |  |  | $ | 492 |  |  | $ | 111,923 |  |  | $ | — |
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 September 30, 2019 using: |
(Dollars in thousands) |  | Total carrying value at |  |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
Assets: |  | September 30, 2019 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Impaired Loans |  | $ | 879 |  |  | $ | — |  |  | $ | — |  |  | $ | 879 |
Bank Premises and Equipment Held for Sale |  |  | 1,274 |  |  |  | — |  |  |  | — |  |  |  | 1,274 |
Foreclosed Assets Held for Sale |  |  | 130 |  |  |  | — |  |  |  | — |  |  |  | 130 |
|  |  |  |  |  | Fair value measurements at December 31, 2018 using: |
(Dollars in thousands) |  | Total carrying value at |  |  | Quoted prices in active markets |  |  | Significant other observable inputs |  |  | Significant unobservable inputs |
Assets: |  | December 31, 2018 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Impaired Loans |  | $ | 4,935 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,935 |
Foreclosed Assets Held for Sale |  |  | 581 |  |  |  | — |  |  |  | — |  |  |  | 581 |
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 |
September 30, 2019 |  | Fair Value Estimate |  |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average |
Impaired Loans |  | $ | 879 |  |  | Appraisal of collateral (a), (b) |  | Appraisal adjustments (b) |  | 0% - 69% |  | 36% |
Bank Premises and Equipment Held for Sale |  |  | 1,274 |  |  | Negotiated sales contract (c) |  | Selling costs (c) |  | 2% - 2% |  | 2% |
Foreclosed Assets Held for Sale |  |  | 130 |  |  | Appraisal of collateral (a), (b) |  | Appraisal adjustments (b) |  | 24% - 27% |  | 25% |
(Dollars in thousands) |  | Quantitative Information about Level 3 Fair Value Measurements |
December 31, 2018 |  | Fair Value Estimate |  |  | Valuation Technique |  | Unobservable Input |  | Range |  | Weighted Average |
Impaired Loans |  | $ | 4,935 |  |  | Appraisal of collateral (a), (b) |  | Appraisal adjustments (b) |  | 26% - 100% |  | 40% |
Foreclosed Assets Held for Sale |  |  | 581 |  |  | Appraisal of collateral (a), (b) |  | Appraisal adjustments (b) |  | 17% - 17% |  | 17% |
| (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.
| (c) | Fair value was determined through a negotiated sales contract executed during the first quarter of 2019, adjusted for selling costs. See Note 7 – Bank Premises and Equipment Held For Sale for more information.
Fair Value, by Balance Sheet Grouping | The following table summarizes the carrying value and fair value of financial instruments at September 30, 2019 and December 31, 2018.
(Dollars in thousands) | September 30, 2019 |  |  | December 31, 2018 |
| Carrying |  |  | Fair |  |  | Carrying |  |  | Fair |
| Value |  |  | Value |  |  | Value |  |  | Value |
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 160,879 |  |  | $ | 160,879 |  |  | $ | 40,065 |  |  | $ | 40,065 |
Available-for-sale investment securities |  | 52,419 |  |  |  | 52,419 |  |  |  | 111,923 |  |  |  | 111,923 |
Held-to-maturity investment securities |  | 170,472 |  |  |  | 173,722 |  |  |  | 168,370 |  |  |  | 166,582 |
Equity securities |  | 509 |  |  |  | 509 |  |  |  | 492 |  |  |  | 492 |
Loans held for sale |  | 7,115 |  |  |  | 7,115 |  |  |  | 1,702 |  |  |  | 1,702 |
Net loans and leases |  | 1,701,118 |  |  |  | 1,738,201 |  |  |  | 1,615,670 |  |  |  | 1,622,287 |
Restricted investment in bank stocks |  | 6,105 |  |  |  | 6,105 |  |  |  | 6,646 |  |  |  | 6,646 |
Accrued interest receivable |  | 8,414 |  |  |  | 8,414 |  |  |  | 8,244 |  |  |  | 8,244 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits | $ | 1,890,093 |  |  |  | 1,894,019 |  |  | $ | 1,726,026 |  |  | $ | 1,725,674 |
Short-term borrowings |  | 12,000 |  |  |  | 12,000 |  |  |  | 43,100 |  |  |  | 43,100 |
Long-term debt (a) |  | 59,400 |  |  |  | 54,330 |  |  |  | 48,024 |  |  |  | 44,585 |
Subordinated debt |  | 27,067 |  |  |  | 25,304 |  |  |  | 27,082 |  |  |  | 24,881 |
Accrued interest payable |  | 2,823 |  |  |  | 2,823 |  |  |  | 2,262 |  |  |  | 2,262 |
| (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 September 30, 2019 and December 31, 2018. Carrying values approximate fair values for cash and cash equivalents, interest-bearing time balances with other financial institutions, loans held for sale, restricted investment in bank stocks, mortgage servicing rights, 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 |
September 30, 2019 |  | Amount |  |  | Fair Value |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Financial instruments - assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held-to-maturity investment securities |  | $ | 170,472 |  |  | $ | 173,722 |  |  | $ | — |  |  | $ | 173,722 |  |  | $ | — |
Net loans and leases |  |  | 1,701,118 |  |  |  | 1,738,201 |  |  |  | — |  |  |  | — |  |  |  | 1,738,201 |
Financial instruments - liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 1,890,093 |  |  | $ | 1,894,019 |  |  | $ | — |  |  | $ | 1,894,019 |  |  | $ | — |
Long-term debt (a) |  |  | 59,400 |  |  |  | 54,330 |  |  |  | — |  |  |  | 54,330 |  |  |  | — |
Subordinated debt |  |  | 27,067 |  |  |  | 25,304 |  |  |  | — |  |  |  | 25,304 |  |  |  | — |
|  |  |  |  |  |  |  |  |  | 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, 2018 |  | Amount |  |  | Fair Value |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
Financial instruments - assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Held-to-maturity investment securities |  | $ | 168,370 |  |  | $ | 166,582 |  |  | $ | — |  |  | $ | 166,582 |  |  | $ | — |
Net loans and leases |  |  | 1,615,670 |  |  |  | 1,622,287 |  |  |  | — |  |  |  | — |  |  |  | 1,622,287 |
Financial instruments - liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 1,726,026 |  |  | $ | 1,725,674 |  |  | $ | — |  |  | $ | 1,725,674 |  |  | $ | — |
Long-term debt |  |  | 48,024 |  |  |  | 44,585 |  |  |  | — |  |  |  | 44,585 |  |  |  | — |
Subordinated debt |  |  | 27,082 |  |  |  | 24,881 |  |  |  | — |  |  |  | 24,881 |  |  |  | — |
| (a) | Long-term debt excludes finance lease obligations.

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