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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2019 using:
(Dollars in thousands)		Total carrying value at				Quoted prices in active markets				Significant other observable inputs				Significant unobservable inputs
Assets:		December 31, 2019				(Level 1)				(Level 2)				(Level 3)
Available-for-sale debt securities:
U.S. government agencies		$	22,830			$	—			$	22,830			$	—
Mortgage-backed U.S. government agencies			12,890				—				12,890				—
State and political subdivision obligations			30				—				30				—
Corporate debt securities			1,259				—				1,259				—
Other assets:
Equity securities			507				507				—				—
		$	37,516			$	507			$	37,009			$	—

						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 debt securities:
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				—				—
		$	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 December 31, 2019 using:
(Dollars in thousands)		Total carrying value at				Quoted prices in active markets				Significant other observable inputs				Significant unobservable inputs
Assets:		December 31, 2019				(Level 1)				(Level 2)				(Level 3)
Impaired Loans		$	271			$	—			$	—			$	271
Foreclosed Assets Held for Sale			122				—				—				122

						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

December 31, 2019

Fair Value Estimate

Valuation Technique

Unobservable Input

Range

Weighted Average

Impaired Loans

$

271

Appraisal of collateral (a), (b)

Appraisal adjustments (b)

26% - 85%

36%

Foreclosed Assets Held for Sale

122

Appraisal of collateral (a), (b)

Appraisal adjustments (b)

8% - 27%

16%

(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.

Fair Value, by Balance Sheet Grouping

The following table summarizes the carrying value and fair value of financial instruments at December 31, 2019 and 2018.

(Dollars in thousands)		December 31, 2019								December 31, 2018
		Carrying				Fair				Carrying				Fair
		Value				Value				Value				Value
Financial assets:
Cash and cash equivalents		$	139,030			$	139,030			$	40,065			$	40,065
Available for sale investment securities			37,009				37,009				111,923				111,923
Held to maturity investment securities			136,477				137,476				168,370				166,582
Loans held for sale			8,422				8,630				1,702				1,702
Equity securities			507				507				492				492
Net loans and leases			1,753,241				1,789,402				1,615,670				1,622,287
Restricted investment in bank stocks			4,902				4,902				6,646				6,646
Accrued interest receivable			2,810				2,810				8,244				8,244
Financial liabilities:
Deposits		$	1,912,394			$	1,916,624			$	1,726,026			$	1,725,674
Short-term borrowings			—				—				43,100				43,100
Long-term debt (a)			29,352				30,216				48,024				44,585
Subordinated debt			27,070				25,273				27,082				24,881
Accrued interest payable			2,208				2,208				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 presents the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn’s financial instruments as of December 31, 2019 and 2018.  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 as valued using Level 1 Inputs, these instruments are valued using Level 2 Inputs.  The following tables exclude financial instruments for which the placement in the fair value hierarchy has been disclosed elsewhere or for which the carrying amount approximates fair value.

										Fair Value Measurements
(Dollars in thousands)										Quoted Prices				Significant
										in Active Markets				Other				Significant
										for Identical Assets				Observable				Unobservable
		Carrying				Fair				or Liabilities				Inputs				Inputs
December 31, 2019		Amount				Value				(Level 1)				(Level 2)				(Level 3)
Financial instruments - assets
Held-to-maturity investment securities		$	136,477			$	137,476			$	—			$	137,476			$	—
Loans held for sale			8,422				8,630				—				8,630				—
Net loans and leases			1,753,241				1,789,402				—				—				1,789,402
Financial instruments - liabilities
Deposits		$	1,912,394			$	1,916,624			$	—			$	1,916,624			$	—
Long-term debt (a)			29,352				30,216				—				30,216				—
Subordinated debt			27,070				25,273				—				25,273				—

										Fair Value Measurements
(Dollars in thousands)										Quoted Prices				Significant
										in Active Markets				Other				Significant
										for Identical Assets				Observable				Unobservable
		Carrying				Fair				or Liabilities				Inputs				Inputs
December 31, 2018		Amount				Value				(Level 1)				(Level 2)				(Level 3)
Financial instruments - assets
Held-to-maturity investment securities		$	168,370			$	166,582			$	—			$	166,582			$	—
Loans held for sale			1,702				1,702				—				1,702				—
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				—

X

- Definition

Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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