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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
As of December 31, 2022 and 2021, Mid Penn did not designate any derivative financial instruments as formal hedging relationships. Mid Penn’s free-standing derivative financial instruments are required to be carried at their fair value on the Consolidated Balance Sheets.
Mortgage Banking Derivative Financial Instruments
In connection with its mortgage banking activities, Mid Penn enters into commitments to originate certain fixed-rate residential mortgage loans for customers, also referred to as interest rate locks. In addition, Mid Penn enters into forward commitments for the future sales or purchases of mortgage-backed securities to or from third-party counterparties to hedge the effect of changes in interest rates on the values of both the interest rate locks and mortgage loans held for sale. Forward sales commitments may also be in the form of commitments to sell individual mortgage loans at a fixed price at a future date. The amount necessary to settle each interest rate lock is based on the price that secondary market investors would pay for loans with similar characteristics, including interest rate and term, as of the date fair value is measured.
Loan-level Interest Rate Swaps
Mid Penn enters into loan-level interest rate swaps with certain qualifying commercial loan customers to meet their interest rate risk management needs. Mid Penn simultaneously enters into interest rate swaps with dealer counterparties, with identical notional amounts and terms. The net result of the offsetting customer and dealer counterparty swap agreements is that the customer pays a fixed rate of interest and Mid Penn receives a floating rate. Mid Penn’s loan-level interest rate swaps are considered derivatives but are not accounted for using hedge accounting.
The notional amount and fair value of derivative financial instruments as of December 31:
20222021
(In thousands)Notional AmountAsset (Liability) Fair Value Notional AmountAsset (Liability) Fair Value
Interest Rate Lock Commitments
Positive Fair Values$274 $3 $13,437 $65 
Negative Fair Values 5,252 (40)2,670 (9)
Forward Commitments
Positive Fair Values4,750 43 5,750 10 
Negative Fair Values— — 6,500 (13)
Interest Rate Swaps with Customers
Positive Fair Values16,650 164 79,814 853 
Negative Fair Values107,145 (11,533)29,763 (955)
Interest Rate Swaps with Counterparties
Positive Fair Values107,145 11,533 29,763 955 
Negative Fair Values16,650 (164)79,814 (853)
The following table presents derivative financial instruments and the amount of the net gains or losses recognized within other noninterest income on the Consolidated Statements of Income for the years ended December 31:
(In thousands)20222021
Interest Rate Lock Commitments$(93)$56 
Forward Commitments46 32 
Total$(47)$88 
The gross amounts of commercial loan swap derivatives, the amounts offset and the carrying values in the Consolidated Balance Sheets, and the collateral pledged to support such agreements are presented below as of December 31:
(In thousands)20222021
Interest Rate Swap Contracts - Commercial Loans:
Gross amounts recognized$11,697 $102 
Gross amounts offset11,697 102 
Net Amounts Presented in the Consolidated Balance Sheets— — 
Gross amounts not offset:
Cash collateral (1)
1,600 1,600 
Net Amounts$1,600 $1,600 
(1)Included in cash and due from banks on the Consolidated Balance Sheet