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Investment Securities | 9 Months Ended
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Sep. 30, 2022
Securities Financing Transactions Disclosures [Abstract] |
Investment Securities | Investment Securities The majority of the investment portfolio is comprised of securities issued by U.S. Treasury and government agencies, mortgage-backed U.S. government agencies, and state and political subdivision obligations. The amortized cost, fair value, and unrealized gains and losses on investment securities at September 30, 2022 and December 31, 2021 are as follows:
(Dollars in thousands) |  | Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
September 30, 2022 |  |  |  |  |  |  |  |
Available-for-sale debt securities: |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | $ | 39,511 |  |  | $ | — |  |  | $ | 1,927 |  |  | $ | 37,584 |
Mortgage-backed U.S. government agencies |  | 187,757 |  |  | — |  |  | 19,553 |  |  | 168,204 |
State and political subdivision obligations |  | 4,360 |  |  | — |  |  | 986 |  |  | 3,374 |
Corporate debt securities |  | 35,468 |  |  | — |  |  | 2,435 |  |  | 33,033 |
Total available-for-sale debt securities |  | 267,096 |  |  | — |  |  | 24,901 |  |  | 242,195 |
Held-to-maturity debt securities: |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | $ | 245,638 |  |  | $ | 3 |  |  | $ | 36,102 |  |  | $ | 209,539 |
Mortgage-backed U.S. government agencies |  | 52,788 |  |  | — |  |  | 7,325 |  |  | 45,463 |
State and political subdivision obligations |  | 87,724 |  |  | — |  |  | 10,951 |  |  | 76,773 |
Corporate debt securities |  | 15,992 |  |  | — |  |  | 1,142 |  |  | 14,850 |
Total held-to-maturity debt securities |  | 402,142 |  |  | 3 |  |  | 55,520 |  |  | 346,625 |
Total |  | $ | 669,238 |  |  | $ | 3 |  |  | $ | 80,421 |  |  | $ | 588,820 |
(Dollars in thousands) |  | Amortized Cost |  | Unrealized Gains |  | Unrealized Losses |  | Fair Value
December 31, 2021 |  |  |  |  |  |  |  |
Available-for-sale debt securities: |  |  |  |  |  |  |  |
Mortgage-backed U.S. government agencies |  | $ | 49,760 |  |  | $ | 3 |  |  | $ | 283 |  |  | $ | 49,480 |
State and political subdivision obligations |  | 3,899 |  |  | 26 |  |  | 11 |  |  | 3,914 |
Corporate debt securities |  | 9,525 |  |  | — |  |  | 57 |  |  | 9,468 |
Total available-for-sale debt securities |  | 63,184 |  |  | 29 |  |  | 351 |  |  | 62,862 |
Held-to-maturity debt securities: |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | $ | 178,136 |  |  | $ | 26 |  |  | $ | 1,165 |  |  | $ | 176,997 |
Mortgage-backed U.S. government agencies |  | 61,157 |  |  | 440 |  |  | 272 |  |  | 61,325 |
State and political subdivision obligations |  | 75,958 |  |  | 2,305 |  |  | 27 |  |  | 78,236 |
Corporate debt securities |  | 14,006 |  |  | 133 |  |  | 71 |  |  | 14,068 |
Total held-to-maturity debt securities |  | 329,257 |  |  | 2,904 |  |  | 1,535 |  |  | 330,626 |
Total |  | $ | 392,441 |  |  | $ | 2,933 |  |  | $ | 1,886 |  |  | $ | 393,488 |
Estimated fair values of debt securities are based on quoted market prices, where applicable. If quoted market prices are not available, fair values are based on quoted market prices of instruments of a similar type, credit quality and structure, adjusted for differences between the quoted instruments and the instruments being valued. See "Note 8 - Fair Value Measurement," for additional information. Investment securities having a fair value of $392.3 million at September 30, 2022 and $244.8 million at December 31, 2021 were pledged to secure public deposits, some Trust department deposit accounts, and certain other borrowings. In accordance with legal provisions for alternatives other than pledging of investments, Mid Penn also obtains letters of credit from the Federal Home Loan Bank of Pittsburgh ("FHLB") to secure certain public deposits. These FHLB letter of credit commitments totaled $265.3 million as of September 30, 2022 and $450.9 million as of December 31, 2021. The following tables present gross unrealized losses and fair value of debt security investments aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2022 and December 31, 2021.
(Dollars in thousands) |  | Less Than 12 Months |  | 12 Months or More |  | Total
September 30, 2022 |  | Number of Securities |  | Fair Value |  | Unrealized Losses |  | Number of Securities |  | Fair Value |  | Unrealized Losses |  | Number of Securities |  | Fair Value |  | Unrealized Losses
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | — |  | $ | — |  |  | $ | — |  |  | 20 |  | $ | 37,584 |  |  | $ | 1,927 |  |  | 20 |  | $ | 37,584 |  |  | $ | 1,927 |
Mortgage-backed U.S. government agencies |  | — |  | — |  |  | — |  |  | 91 |  | 164,216 |  |  | 19,553 |  |  | 91 |  | 164,216 |  |  | 19,553 |
State and political subdivision obligations |  | — |  | — |  |  | — |  |  | 8 |  | 3,374 |  |  | 986 |  |  | 8 |  | 3,374 |  |  | 986 |
Corporate debt securities |  | 3 |  | 2,523 |  |  | 477 |  |  | 14 |  | 27,260 |  |  | 1,958 |  |  | 17 |  | 29,783 |  |  | 2,435 |
Total temporarily impaired available-for-sale debt securities |  | 3 |  | $ | 2,523 |  |  | $ | 477 |  |  | 133 |  | $ | 232,434 |  |  | $ | 24,424 |  |  | 136 |  | $ | 234,957 |  |  | $ | 24,901 |
Held-to-maturity debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | 25 |  | $ | 30,523 |  |  | $ | 7,405 |  |  | 119 |  | $ | 177,014 |  |  | $ | 28,697 |  |  | 144 |  | $ | 207,537 |  |  | $ | 36,102 |
Mortgage-backed U.S. government agencies |  | 1 |  | 316 |  |  | 43 |  |  | 63 |  | 45,147 |  |  | 7,282 |  |  | 64 |  | 45,463 |  |  | 7,325 |
State and political subdivision obligations |  | 12 |  | 2,338 |  |  | 535 |  |  | 194 |  | 74,435 |  |  | 10,416 |  |  | 206 |  | 76,773 |  |  | 10,951 |
Corporate debt securities |  | 5 |  | 5,156 |  |  | 844 |  |  | 3 |  | 4,753 |  |  | 298 |  |  | 8 |  | 9,909 |  |  | 1,142 |
Total temporarily impaired held-to-maturity debt securities |  | 43 |  | 38,333 |  |  | 8,827 |  |  | 379 |  | 301,349 |  |  | 46,693 |  |  | 422 |  | 339,682 |  |  | 55,520 |
Total |  | 46 |  | $ | 40,856 |  |  | $ | 9,304 |  |  | 512 |  | $ | 533,783 |  |  | $ | 71,117 |  |  | 558 |  | $ | 574,639 |  |  | $ | 80,421 |
(Dollars in thousands) |  | Less Than 12 Months |  | 12 Months or More |  | Total
December 31, 2021 |  | Number of Securities |  | Fair Value |  | Unrealized Losses |  | Number of Securities |  | Fair Value |  | Unrealized Losses |  | Number of Securities |  | Fair Value |  | Unrealized Losses
Available-for-sale securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies |  | 24 |  | $ | 45,476 |  |  | $ | 283 |  |  | — |  | $ | — |  |  | $ | — |  |  | 24 |  | $ | 45,476 |  |  | $ | 283 |
State and political subdivision obligations |  | 2 |  | 1,168 |  |  | 11 |  |  | — |  | — |  |  | — |  |  | 2 |  | 1,168 |  |  | 11 |
Corporate debt securities |  | 4 |  | 4,943 |  |  | 57 |  |  | — |  | — |  |  | — |  |  | 4 |  | 4,943 |  |  | 57 |
Total temporarily impaired available-for-sale securities |  | 30 |  | $ | 51,587 |  |  | $ | 351 |  |  | — |  | $ | — |  |  | $ | — |  |  | 30 |  | $ | 51,587 |  |  | $ | 351 |
Held-to-maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government agencies |  | 91 |  | $ | 149,425 |  |  | $ | 1,165 |  |  | — |  | $ | — |  |  | $ | — |  |  | 91 |  | $ | 149,425 |  |  | $ | 1,165 |
Mortgage-backed U.S. government agencies |  | 24 |  | 39,995 |  |  | 272 |  |  | — |  | — |  |  | — |  |  | 24 |  | 39,995 |  |  | 272 |
State and political subdivision obligations |  | 17 |  | 5,302 |  |  | 25 |  |  | 1 |  | 255 |  |  | 2 |  |  | 18 |  | 5,557 |  |  | 27 |
Corporate debt securities |  | 6 |  | 6,928 |  |  | 71 |  |  | — |  | — |  |  | — |  |  | 6 |  | 6,928 |  |  | 71 |
Total temporarily impaired held to maturity securities |  | 138 |  | 201,650 |  |  | 1,533 |  |  | 1 |  | 255 |  |  | 2 |  |  | 139 |  | 201,905 |  |  | 1,535 |
Total |  | 168 |  | $ | 253,237 |  |  | $ | 1,884 |  |  | 1 |  | $ | 255 |  |  | $ | 2 |  |  | 169 |  | $ | 253,492 |  |  | $ | 1,886 |
Management evaluates securities for other-than-temporary impairment on at least a quarterly basis, and more frequently when economic or market concerns warrant such additional evaluation. Consideration is given to the length of time and the extent to which the fair value of the security has been less than amortized cost, as well as the overall financial condition of the issuer. In addition, for debt securities, Mid Penn considers (i) whether management has the intent to sell the security, (ii) whether it is more likely than not that management will be required to sell the security prior to its anticipated recovery, and (iii) whether management expects to recover the entire amortized cost basis. Mid Penn had no securities considered by management to be other-than-temporarily impaired as of September 30, 2022, December 31, 2021, or September 30, 2021, and did not record any securities impairment charges in the respective periods ended on these dates. Mid Penn does not consider the securities with unrealized losses on the respective dates to be other-than-temporarily impaired as the unrealized losses were deemed to be temporary changes in value related to market movements in interest yields at various periods similar to the maturity dates of holdings in the investment portfolio, and not reflective of an erosion of credit quality. There were no gross realized gains and losses on sales of available-for-sale debt securities for the three and nine months ended September 30, 2022. For the three and nine months ended September 30, 2021 there were realized gains of $79 thousand. The table below illustrates the maturity distribution of investment securities at amortized cost and fair value as of September 30, 2022.
(Dollars in thousands) | Available-for-sale |  | Held-to-maturity
September 30, 2022 | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in 1 year or less | $ | 250 |  |  | $ | 250 |  |  | $ | — |  |  | $ | — |
Due after 1 year but within 5 years | 40,013 |  |  | 38,602 |  |  | 73,579 |  |  | 69,250 |
Due after 5 years but within 10 years | 35,017 |  |  | 32,006 |  |  | 232,023 |  |  | 197,794 |
Due after 10 years | 4,059 |  |  | 3,133 |  |  | 43,752 |  |  | 34,118 |
| 79,339 |  |  | 73,991 |  |  | 349,354 |  |  | 301,162 |
Mortgage-backed securities | 187,757 |  |  | 168,204 |  |  | 52,788 |  |  | 45,463 |
| $ | 267,096 |  |  | $ | 242,195 |  |  | $ | 402,142 |  |  | $ | 346,625 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI https://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI https://asc.fasb.org/subtopic&trid=2176304 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher SEC -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph (b) + Details
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