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Loans and Allowance for Loan and Lease Losses | 9 Months Ended
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Sep. 30, 2020
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract] |
Loans and Allowance for Loan and Lease Losses |
(4) | Loans and Allowance for Loan and Lease Losses
The types of loans in Mid Penn’s portfolio, summarized by those rated as “pass” (net of deferred fees and costs of $16,536,000 as of September 30, 2020 and $1,081,000 as of December 31, 2019), and the loans classified as “special mention” and “substandard” within Mid Penn’s internal risk rating system as of September 30, 2020 and December 31, 2019, are as follows:
(Dollars in thousands) |  |  |  | Special |  |  |  |  |  |
September 30, 2020 |  | Pass |  |  | Mention |  |  | Substandard |  |  | Total |
Commercial and industrial |  | $ | 956,097 |  |  | $ | 9,657 |  |  | $ | 3,121 |  |  | $ | 968,875 |
Commercial real estate |  |  | 1,004,999 |  |  |  | 2,406 |  |  |  | 14,013 |  |  |  | 1,021,418 |
Commercial real estate - construction |  |  | 238,176 |  |  |  | — |  |  |  | 32 |  |  |  | 238,208 |
Residential mortgage |  |  | 214,177 |  |  |  | 53 |  |  |  | 1,359 |  |  |  | 215,589 |
Home equity |  |  | 68,002 |  |  |  | 5 |  |  |  | 2,393 |  |  |  | 70,400 |
Consumer |  |  | 7,337 |  |  |  | — |  |  |  | — |  |  |  | 7,337 |
|  | $ | 2,488,788 |  |  | $ | 12,121 |  |  | $ | 20,918 |  |  | $ | 2,521,827 |
(Dollars in thousands) |  |  |  |  |  | Special |  |  |  |  |  |  |  |  |
December 31, 2019 |  | Pass |  |  | Mention |  |  | Substandard |  |  | Total |
Commercial and industrial |  | $ | 326,573 |  |  | $ | 9,558 |  |  | $ | 3,016 |  |  | $ | 339,147 |
Commercial real estate |  |  | 913,001 |  |  |  | 2,426 |  |  |  | 13,711 |  |  |  | 929,138 |
Commercial real estate - construction |  |  | 181,650 |  |  |  | — |  |  |  | 40 |  |  |  | 181,690 |
Residential mortgage |  |  | 235,252 |  |  |  | 55 |  |  |  | 1,417 |  |  |  | 236,724 |
Home equity |  |  | 68,224 |  |  |  | — |  |  |  | 47 |  |  |  | 68,271 |
Consumer |  |  | 7,786 |  |  |  | — |  |  |  | — |  |  |  | 7,786 |
|  | $ | 1,732,486 |  |  | $ | 12,039 |  |  | $ | 18,231 |  |  | $ | 1,762,756 |
The increase in deferred fees and costs from December 31, 2019 to September 30, 2020 was the result of collected but unearned PPP loan processing fees related to the PPP loans which Mid Penn processed and disbursed during the second and third quarters of 2020. PPP loans are included in commercial and industrial loans and are fully guaranteed by the SBA; therefore, all PPP loans outstanding (net of the related deferred PPP fees) are classified as “pass” within Mid Penn’s internal risk rating system as of September 30, 2020. Mid Penn had no loans classified as doubtful as of September 30, 2020 and December 31, 2019. Impaired loans by loan portfolio class as of September 30, 2020 and December 31, 2019 are summarized as follows:
|  | September 30, 2020 |  |  | December 31, 2019 |
(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 |  | $ | 859 |  |  | $ | 891 |  |  | $ | — |  |  | $ | 890 |  |  | $ | 890 |  |  | $ | — |
Commercial real estate |  |  | 7,074 |  |  |  | 7,425 |  |  |  | — |  |  |  | 7,973 |  |  |  | 8,366 |  |  |  | — |
Commercial real estate - construction |  |  | 32 |  |  |  | 34 |  |  |  | — |  |  |  | 40 |  |  |  | 61 |  |  |  | — |
Residential mortgage |  |  | 834 |  |  |  | 859 |  |  |  | — |  |  |  | 817 |  |  |  | 838 |  |  |  | — |
Home equity |  |  | 2,386 |  |  |  | 2,417 |  |  |  | — |  |  |  | 25 |  |  |  | 27 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
With no related allowance recorded and acquired with credit deterioration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | 68 |  |  | $ | — |
Commercial real estate |  |  | 1,426 |  |  |  | 1,698 |  |  |  | — |  |  |  | 1,423 |  |  |  | 1,708 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | 342 |  |  |  | 585 |  |  |  | — |  |  |  | 381 |  |  |  | 578 |  |  |  | — |
Home equity |  |  | — |  |  |  | 14 |  |  |  | — |  |  |  | 1 |  |  |  | 5 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 53 |  |  | $ | 73 |  |  | $ | 41 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate |  |  | 360 |  |  |  | 405 |  |  |  | 141 |  |  |  | 338 |  |  |  | 380 |  |  |  | 166 |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Home equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Impaired Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 912 |  |  | $ | 964 |  |  | $ | 41 |  |  | $ | 893 |  |  | $ | 958 |  |  | $ | — |
Commercial real estate |  |  | 8,860 |  |  |  | 9,528 |  |  |  | 141 |  |  |  | 9,734 |  |  |  | 10,454 |  |  |  | 166 |
Commercial real estate - construction |  |  | 32 |  |  |  | 34 |  |  |  | — |  |  |  | 40 |  |  |  | 61 |  |  |  | — |
Residential mortgage |  |  | 1,176 |  |  |  | 1,444 |  |  |  | — |  |  |  | 1,198 |  |  |  | 1,416 |  |  |  | — |
Home equity |  |  | 2,386 |  |  |  | 2,431 |  |  |  | — |  |  |  | 26 |  |  |  | 32 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
The average recorded investment of impaired loans and related interest income recognized for the three and nine months ended September 30, 2020 and 2019 are summarized as follows:
|  | Three Months Ended |
|  | September 30, 2020 |  |  | September 30, 2019 |
(Dollars in thousands) |  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 932 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate |  |  | 7,171 |  |  |  | 5 |  |  |  | 1,917 |  |  |  | — |
Commercial real estate - construction |  |  | 32 |  |  |  | — |  |  |  | 40 |  |  |  | 4 |
Residential mortgage |  |  | 805 |  |  |  | 6 |  |  |  | 889 |  |  |  | 7 |
Home equity |  |  | 2,396 |  |  |  | — |  |  |  | 27 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
With no related allowance recorded and acquired with credit deterioration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | — |  |  | $ | — |  |  | $ | 11 |  |  | $ | — |
Commercial real estate |  |  | 1,428 |  |  |  | — |  |  |  | 1,630 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | 347 |  |  |  | — |  |  |  | 1,055 |  |  |  | — |
Home equity |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 130 |  |  | $ | — |  |  | $ | 38 |  |  | $ | — |
Commercial real estate |  |  | 560 |  |  |  | — |  |  |  | 617 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Home equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Impaired Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1,062 |  |  | $ | — |  |  | $ | 49 |  |  | $ | — |
Commercial real estate |  |  | 9,159 |  |  |  | 5 |  |  |  | 4,164 |  |  |  | — |
Commercial real estate - construction |  |  | 32 |  |  |  | — |  |  |  | 40 |  |  |  | 4 |
Residential mortgage |  |  | 1,152 |  |  |  | 6 |  |  |  | 1,944 |  |  |  | 7 |
Home equity |  |  | 2,396 |  |  |  | — |  |  |  | 31 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | Nine Months Ended |
|  | September 30, 2020 |  |  | September 30, 2019 |
(Dollars in thousands) |  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 911 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial real estate |  |  | 7,325 |  |  |  | 5 |  |  |  | 2,697 |  |  |  | 11 |
Commercial real estate - construction |  |  | 36 |  |  |  | — |  |  |  | 40 |  |  |  | — |
Residential mortgage |  |  | 794 |  |  |  | 19 |  |  |  | 1,151 |  |  |  | 21 |
Home equity |  |  | 1,210 |  |  |  | — |  |  |  | 38 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
With no related allowance recorded and acquired with credit deterioration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1 |  |  | $ | — |  |  | $ | 22 |  |  | $ | — |
Commercial real estate |  |  | 1,423 |  |  |  | — |  |  |  | 1,602 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | 361 |  |  |  | — |  |  |  | 1,152 |  |  |  | — |
Home equity |  |  | 1 |  |  |  | — |  |  |  | 4 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 67 |  |  | $ | — |  |  | $ | 1,202 |  |  | $ | 3 |
Commercial real estate |  |  | 530 |  |  |  | — |  |  |  | 633 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | 183 |  |  |  | — |
Residential mortgage |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Home equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Impaired Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 979 |  |  | $ | — |  |  | $ | 1,224 |  |  | $ | 3 |
Commercial real estate |  |  | 9,278 |  |  |  | 5 |  |  |  | 4,932 |  |  |  | 11 |
Commercial real estate - construction |  |  | 36 |  |  |  | — |  |  |  | 223 |  |  |  | — |
Residential mortgage |  |  | 1,155 |  |  |  | 19 |  |  |  | 2,303 |  |  |  | 21 |
Home equity |  |  | 1,211 |  |  |  | — |  |  |  | 42 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of September 30, 2020 and December 31, 2019 are summarized as follows:
(Dollars in thousands) |  | September 30, 2020 |  |  | December 31, 2019 |
Commercial and industrial |  | $ | 913 |  |  | $ | 894 |
Commercial real estate |  |  | 8,859 |  |  |  | 9,800 |
Commercial real estate - construction |  |  | 32 |  |  |  | 40 |
Residential mortgage |  |  | 706 |  |  |  | 711 |
Home equity |  |  | 2,386 |  |  |  | 26 |
|  | $ | 12,896 |  |  | $ | 11,471 |
The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The classes of the loan portfolio summarized by the past due status as of September 30, 2020 and December 31, 2019 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 |
September 30, 2020 |  | Due |  |  | Due |  |  | Days |  |  | Due |  |  | Current |  |  | Total Loans |  |  | Accruing |
Commercial and industrial |  | $ | — |  |  | $ | 1,490 |  |  | $ | 866 |  |  | $ | 2,356 |  |  | $ | 966,519 |  |  | $ | 968,875 |  |  | $ | — |
Commercial real estate |  |  | — |  |  |  | 1,029 |  |  |  | 6,842 |  |  |  | 7,871 |  |  |  | 1,012,121 |  |  |  | 1,019,992 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 238,208 |  |  |  | 238,208 |  |  |  | — |
Residential mortgage |  |  | — |  |  |  | 2 |  |  |  | 328 |  |  |  | 330 |  |  |  | 214,917 |  |  |  | 215,247 |  |  |  | — |
Home equity |  |  | — |  |  |  | 16 |  |  |  | 2,364 |  |  |  | 2,380 |  |  |  | 68,020 |  |  |  | 70,400 |  |  |  | — |
Consumer |  |  | 3 |  |  |  | 1 |  |  |  | — |  |  |  | 4 |  |  |  | 7,333 |  |  |  | 7,337 |  |  |  | — |
Loans acquired with credit deterioration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial real estate |  |  | — |  |  |  | — |  |  |  | 1,417 |  |  |  | 1,417 |  |  |  | 9 |  |  |  | 1,426 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | — |  |  |  | — |  |  |  | 182 |  |  |  | 182 |  |  |  | 160 |  |  |  | 342 |  |  |  | — |
Home equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 3 |  |  | $ | 2,538 |  |  | $ | 11,999 |  |  | $ | 14,540 |  |  | $ | 2,507,287 |  |  | $ | 2,521,827 |  |  | $ | — |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |
(Dollars in thousands) |  | 30-59 |  |  | 60-89 |  |  | Greater |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Receivable > |
|  | Days Past |  |  | Days Past |  |  | than 90 |  |  | Total Past |  |  |  |  |  |  |  |  |  |  | 90 Days and |
December 31, 2019 |  | Due |  |  | Due |  |  | Days |  |  | Due |  |  | Current |  |  | Total Loans |  |  | Accruing |
Commercial and industrial |  | $ | — |  |  | $ | 1,059 |  |  | $ | 890 |  |  | $ | 1,949 |  |  | $ | 337,195 |  |  | $ | 339,144 |  |  | $ | — |
Commercial real estate |  |  | 1,298 |  |  |  | 11 |  |  |  | 7,819 |  |  |  | 9,128 |  |  |  | 918,587 |  |  |  | 927,715 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 181,690 |  |  |  | 181,690 |  |  |  | — |
Residential mortgage |  |  | 145 |  |  |  | — |  |  |  | 326 |  |  |  | 471 |  |  |  | 235,872 |  |  |  | 236,343 |  |  |  | — |
Home equity |  |  | 34 |  |  |  | — |  |  |  | — |  |  |  | 34 |  |  |  | 68,236 |  |  |  | 68,270 |  |  |  | — |
Consumer |  |  | 5 |  |  |  | 3 |  |  |  | — |  |  |  | 8 |  |  |  | 7,778 |  |  |  | 7,786 |  |  |  | — |
Loans acquired with credit deterioration: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | — |
Commercial real estate |  |  | 16 |  |  |  | 473 |  |  |  | 934 |  |  |  | 1,423 |  |  |  | — |  |  |  | 1,423 |  |  |  | — |
Commercial real estate - construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Residential mortgage |  |  | 5 |  |  |  | — |  |  |  | 203 |  |  |  | 208 |  |  |  | 173 |  |  |  | 381 |  |  |  | — |
Home equity |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 1 |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 1,503 |  |  | $ | 1,546 |  |  | $ | 10,175 |  |  | $ | 13,224 |  |  | $ | 1,749,532 |  |  | $ | 1,762,756 |  |  | $ | — |
The allowance for loan losses and the related loan loss provision for the periods presented reflect Mid Penn’s continued application of the incurred loss method for estimating credit losses, as Mid Penn is not required to adopt the current expected credit loss (“CECL”) accounting standard until January 1, 2023. PPP loans are included in the commercial and industrial classification and, as the PPP loans are fully guaranteed by the Small Business Administration, no allowance for loan losses was recorded against the $613,924,000 balance of PPP loans outstanding (net of related deferred PPP fees) as of September 30, 2020. The following tables summarize the allowance and recorded investments in loans receivable.
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of, and for the three months ended, September 30, 2020 |  | Commercial and industrial |  |  | Commercial real estate |  |  | Commercial real estate - construction |  |  | Residential mortgage |  |  | Home equity |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
July 1, 2020 |  | $ | 2,786 |  |  | $ | 7,241 |  |  | $ | 65 |  |  | $ | 427 |  |  | $ | 517 |  |  | $ | 2 |  |  | $ | 29 |  |  | $ | 11,067 |
Charge-offs |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | — |  |  |  | (4 | ) |  |  | — |  |  |  | (8 | )
Recoveries |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | — |  |  |  | 11 |
Provisions (credits) |  |  | 138 |  |  |  | 529 |  |  |  | (4 | ) |  |  | 47 |  |  |  | 14 |  |  |  | (7 | ) |  |  | 383 |  |  |  | 1,100 |
Ending balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 |  | $ | 2,924 |  |  | $ | 7,770 |  |  | $ | 61 |  |  | $ | 470 |  |  | $ | 531 |  |  | $ | 2 |  |  | $ | 412 |  |  | $ | 12,170 |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of, and for the nine months ended, September 30, 2020 |  | Commercial and industrial |  |  | Commercial real estate |  |  | Commercial real estate - construction |  |  | Residential mortgage |  |  | Home equity |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2020 |  | $ | 2,341 |  |  | $ | 6,259 |  |  | $ | 51 |  |  | $ | 417 |  |  | $ | 442 |  |  | $ | 2 |  |  | $ | 3 |  |  | $ | 9,515 |
Charge-offs |  |  | (45 | ) |  |  | — |  |  |  | (7 | ) |  |  | (4 | ) |  |  | — |  |  |  | (22 | ) |  |  | — |  |  |  | (78 | )
Recoveries |  |  | 2 |  |  |  | 1 |  |  |  | 2 |  |  |  | 3 |  |  |  | 1 |  |  |  | 24 |  |  |  | — |  |  |  | 33 |
Provisions (credits) |  |  | 626 |  |  |  | 1,510 |  |  |  | 15 |  |  |  | 54 |  |  |  | 88 |  |  |  | (2 | ) |  |  | 409 |  |  |  | 2,700 |
Ending balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 |  |  | 2,924 |  |  |  | 7,770 |  |  |  | 61 |  |  |  | 470 |  |  |  | 531 |  |  |  | 2 |  |  |  | 412 |  |  |  | 12,170 |
Individually evaluated for impairment |  |  | 41 |  |  |  | 141 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 182 |
Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Collectively evaluated for impairment |  | $ | 2,883 |  |  | $ | 7,629 |  |  | $ | 61 |  |  | $ | 470 |  |  | $ | 531 |  |  | $ | 2 |  |  | $ | 412 |  |  | $ | 11,988 |
Loans receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 968,875 |  |  | $ | 1,021,418 |  |  | $ | 238,208 |  |  | $ | 215,589 |  |  | $ | 70,400 |  |  | $ | 7,337 |  |  | $ | — |  |  | $ | 2,521,827 |
Ending balance: individually evaluated for impairment |  |  | 912 |  |  |  | 7,434 |  |  |  | 32 |  |  |  | 834 |  |  |  | 2,386 |  |  |  | — |  |  |  | — |  |  |  | 11,598 |
Ending balance: acquired with credit deterioration |  |  | — |  |  |  | 1,426 |  |  |  | — |  |  |  | 342 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,768 |
Ending balance: collectively evaluated for impairment |  | $ | 967,963 |  |  | $ | 1,012,558 |  |  | $ | 238,176 |  |  | $ | 214,413 |  |  | $ | 68,014 |  |  | $ | 7,337 |  |  | $ | — |  |  | $ | 2,508,461 |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2019 |  | Commercial and industrial |  |  | Commercial real estate |  |  | Commercial real estate - construction |  |  | Residential mortgage |  |  | Home equity |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 2,341 |  |  | $ | 6,259 |  |  | $ | 51 |  |  | $ | 417 |  |  | $ | 442 |  |  | $ | 2 |  |  | $ | 3 |  |  | $ | 9,515 |
Ending balance: individually evaluated for impairment |  |  | — |  |  |  | 166 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 166 |
Ending balance: collectively evaluated for impairment |  | $ | 2,341 |  |  | $ | 6,093 |  |  | $ | 51 |  |  | $ | 417 |  |  | $ | 442 |  |  | $ | 2 |  |  | $ | 3 |  |  | $ | 9,349 |
Loans receivable: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 339,147 |  |  | $ | 929,138 |  |  | $ | 181,690 |  |  | $ | 236,724 |  |  | $ | 68,271 |  |  | $ | 7,786 |  |  | $ | — |  |  | $ | 1,762,756 |
Ending balance: individually evaluated for impairment |  |  | 890 |  |  |  | 8,311 |  |  |  | 40 |  |  |  | 817 |  |  |  | 25 |  |  |  | — |  |  |  | — |  |  |  | 10,083 |
Ending balance: acquired with credit deterioration |  |  | 3 |  |  |  | 1,423 |  |  |  | — |  |  |  | 381 |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 1,808 |
Ending balance: collectively evaluated for impairment |  | $ | 338,254 |  |  | $ | 919,404 |  |  | $ | 181,650 |  |  | $ | 235,526 |  |  | $ | 68,245 |  |  | $ | 7,786 |  |  | $ | — |  |  | $ | 1,750,865 |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of, and for the three months ended, September 30, 2019 |  | Commercial and industrial |  |  | Commercial real estate |  |  | Commercial real estate - construction |  |  | Residential mortgage |  |  | Home equity |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
July 1, 2019 |  | $ | 2,448 |  |  | $ | 5,312 |  |  | $ | 45 |  |  | $ | 476 |  |  | $ | 482 |  |  | $ | 7 |  |  | $ | 1 |  |  | $ | 8,771 |
Charge-offs |  |  | (12 | ) |  |  | (42 | ) |  |  | — |  |  |  | (3 | ) |  |  | — |  |  |  | (9 | ) |  |  | — |  |  |  | (66 | )
Recoveries |  |  | 1 |  |  |  | 41 |  |  |  | — |  |  |  | 2 |  |  |  | 1 |  |  |  | 1 |  |  |  | — |  |  |  | 46 |
Provisions (credits) |  |  | 6 |  |  |  | 544 |  |  |  | 1 |  |  |  | (7 | ) |  |  | 13 |  |  |  | 6 |  |  |  | 2 |  |  |  | 565 |
Ending balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2019 |  | $ | 2,443 |  |  | $ | 5,855 |  |  | $ | 46 |  |  | $ | 468 |  |  | $ | 496 |  |  | $ | 5 |  |  | $ | 3 |  |  | $ | 9,316 |
(Dollars in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
As of, and for the nine months ended, September 30, 2019 |  | Commercial and industrial |  |  | Commercial real estate |  |  | Commercial real estate - construction |  |  | Residential mortgage |  |  | Home equity |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan and lease losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
January 1, 2019 |  |  | 2,391 |  |  |  | 4,703 |  |  |  | 75 |  |  |  | 453 |  |  |  | 528 |  |  |  | 7 |  |  |  | 240 |  |  | $ | 8,397 |
Charge-offs |  |  | (217 | ) |  |  | (53 | ) |  |  | (40 | ) |  |  | (3 | ) |  |  | — |  |  |  | (57 | ) |  |  | — |  |  |  | (370 | )
Recoveries |  |  | 44 |  |  |  | 74 |  |  |  | — |  |  |  | 2 |  |  |  | 2 |  |  |  | 12 |  |  |  | — |  |  |  | 134 |
Provisions (credits) |  |  | 225 |  |  |  | 1,131 |  |  |  | 11 |  |  |  | 16 |  |  |  | (34 | ) |  |  | 43 |  |  |  | (237 | ) |  |  | 1,155 |
Ending balance, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2019 |  |  | 2,443 |  |  |  | 5,855 |  |  |  | 46 |  |  |  | 468 |  |  |  | 496 |  |  |  | 5 |  |  |  | 3 |  |  |  | 9,316 |
Individually evaluated for impairment |  |  | — |  |  |  | 336 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 336 |
Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
collectively evaluated for impairment |  | $ | 2,443 |  |  | $ | 5,519 |  |  | $ | 46 |  |  | $ | 468 |  |  | $ | 496 |  |  | $ | 5 |  |  | $ | 3 |  |  | $ | 8,980 |
Loans receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 320,400 |  |  | $ | 892,060 |  |  | $ | 177,151 |  |  | $ | 243,729 |  |  | $ | 69,240 |  |  | $ | 7,854 |  |  | $ | — |  |  | $ | 1,710,434 |
Ending balance: individually evaluated for impairment |  |  | — |  |  |  | 2,324 |  |  |  | 40 |  |  |  | 881 |  |  |  | 26 |  |  |  | — |  |  |  | — |  |  |  | 3,271 |
Ending balance: acquired with credit deterioration |  |  | 5 |  |  |  | 1,643 |  |  |  | — |  |  |  | 494 |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 2,146 |
Ending balance: collectively evaluated for impairment |  | $ | 320,395 |  |  | $ | 888,093 |  |  | $ | 177,111 |  |  | $ | 242,354 |  |  | $ | 69,210 |  |  | $ | 7,854 |  |  | $ | — |  |  | $ | 1,705,017 |
Mid Penn entered into forbearance or modification agreements on loans currently classified as troubled debt restructures and these agreements have resulted in additional principal repayment. The terms of these forbearance agreements vary and generally involve modifications from the original loan agreements, including either a reduction in the amount of principal payments for certain or extended periods, interest rate reductions, and/or the intent for the loan to be repaid as collateral is sold. Mid Penn’s troubled debt restructured loans at September 30, 2020 totaled $928,000 and included three accruing impaired residential mortgage loans to unrelated borrowers in compliance with the terms of the modifications totaling $470,000. The remaining $458,000 of troubled debt restructurings was attributable to seven loans among five relationships which were classified as nonaccrual impaired based upon a collateral evaluation in accordance with the guidance on impaired loans. The balance of nonaccrual impaired troubled debt restructured loans as of September 30, 2020 was comprised of $409,000 in commercial real estate loans amongst two borrowers, one commercial real estate construction loan for $31,000, one residential mortgage loan for $11,000, and one commercial and industrial loan for $7,000. As of September 30, 2020, there were no defaulted troubled debt restructured loans, as all troubled debt restructured loans were current with respect to their associated forbearance agreements. There were also no defaults on troubled debt restructured loans within twelve months of restructure during 2020. Mid Penn’s troubled debt restructured loans at December 31, 2019 totaled $2,238,000, and included three accruing impaired residential mortgage loans to unrelated borrowers in compliance with the terms of the modifications totaling $490,000. The remaining $1,748,000 of troubled debt restructurings was attributable to eight loans among five relationships which were classified as nonaccrual impaired based upon a collateral evaluation in accordance with the guidance on impaired loans. One large relationship accounted for $1,252,000 of the total $1,748,000 in nonaccrual impaired troubled debt restructured loans. As of December 31, 2019, there were no defaulted troubled debt restructured loans, as all troubled debt restructured loans were current with respect to their associated forbearance agreements. There were also no defaults on troubled debt restructured loans within twelve months of restructure during 2019. The recorded investments in troubled debt restructured loans at September 30, 2020 and December 31, 2019 are as follows:
(Dollars in thousands) | Pre-Modification |  |  | Post-Modification |  |  |  |
September 30, 2020 | Outstanding Recorded Investment |  |  | Outstanding Recorded Investment |  |  | Recorded Investment |
Commercial and industrial | $ | 8 |  |  | $ | 8 |  |  | $ | 7 |
Commercial real estate |  | 1,214 |  |  |  | 1,115 |  |  |  | 409 |
Commercial real estate - construction |  | 40 |  |  |  | 40 |  |  |  | 31 |
Residential mortgage |  | 689 |  |  |  | 687 |  |  |  | 481 |
| $ | 1,951 |  |  | $ | 1,850 |  |  | $ | 928 |
(Dollars in thousands) | Pre-Modification |  |  | Post-Modification |  |  |  |
December 31, 2019 | Outstanding Recorded Investment |  |  | Outstanding Recorded Investment |  |  | Recorded Investment |
Commercial and industrial | $ | 3 |  |  | $ | 3 |  |  | $ | 3 |
Commercial real estate |  | 2,562 |  |  |  | 2,463 |  |  |  | 1,705 |
Commercial real estate - construction |  | 40 |  |  |  | 40 |  |  |  | 40 |
Residential mortgage |  | 677 |  |  |  | 675 |  |  |  | 490 |
| $ | 3,282 |  |  | $ | 3,181 |  |  | $ | 2,238 |
The CARES Act, along with a joint agency statement issued by banking agencies, provides that short-term modifications made in response to COVID-19 do not need to be accounted for as troubled debt restructurings. Depending upon the specific needs and circumstances affecting each borrower, the majority of these modifications ranged from deferrals of both principal and interest payments with some borrowers reverting to interest-only payments. The majority of the deferrals were granted for a period of three months, but some as long as six months, depending upon management’s specific evaluation of each borrower’s circumstances. Interest has and will continue to accrue on loans modified under the CARES Act during the deferral period. During 2020, Mid Penn had provided loan modifications meeting the CARES Act qualifications to over 1,000 borrowers. Mid Penn remains in communication with each of these borrowers to assess the ongoing credit status of the borrowers, and may make further adjustments to a borrower’s modification at some future time if warranted for the specific situation. As of September 30, 2020, the principal balance of loans remaining in this CARES Act qualifying deferment status totaled $32,851,000, or 1 percent of the total loan portfolio, a significant reduction compared to June 30, 2020, when $444,486,000 of loans, representing 18 percent of the total loan portfolio, were in this deferment status, as most borrowers have returned to regular payment status. The following tables provide activity for the accretable yield of acquired impaired loans from the Phoenix (March 2015), Scottdale (January 2018), and First Priority (July 2018) acquisitions for the three and nine months ended September 30, 2020.
(Dollars in thousands) |  |  |  |
|  | Three Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Accretable yield, beginning of period |  | $ | 56 |  |  | $ | 197 |
Accretable yield amortized to interest income |  |  | (7 | ) |  |  | (55 | )
Accretable yield, end of period |  | $ | 49 |  |  | $ | 142 |
(Dollars in thousands) |  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Accretable yield, beginning of period |  | $ | 89 |  |  | $ | 309 |
Accretable yield amortized to interest income |  |  | (40 | ) |  |  | (167 | )
Accretable yield, end of period |  | $ | 49 |  |  | $ | 142 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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