XML 39 R15.htm IDEA: XBRL DOCUMENT v3.24.1
Loans and Allowance for Credit Losses - Loans
 12 Months Ended
Dec. 31, 2023
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans and Allowance for Credit Losses - Loans Loans and Allowance for Credit Losses - Loans
Mid Penn adopted the amendments of FASB ASU 2016-13, on January 1, 2023. The amendments of ASU 2016-13 created FASB ASC Topic 326, "Financial Instruments – Credit Losses," which, among other things, replace much of the guidance and disclosures previously provided in FASB ASC Topic 310, "Receivables." The guidance in FASB ASC Topic 326 replaces the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to determine credit losses. In accordance with FASB ASC Subtopic 326-20, "Financial Instruments – Credit Losses – Measured at Amortized Cost," Mid Penn has developed an ACL methodology effective January 1, 2023, which replaces its previous allowance for loan losses methodology. See the section captioned "Allowance for Credit Losses, effective January 1, 2023" within this note for additional information regarding Mid Penn’s ACL. Mid Penn adopted FASB ASC Topic 326 using the modified retrospective approach prescribed by the amendments of ASU 2016-13; therefore, certain prior year disclosures are presented under legacy GAAP and may not be comparable to current period presentation. In conjunction with the adoption of CECL, the Corporation has revised its segmentation to align with the methodology applied in determining the ACL for loans and leases under CECL. As such, certain reclassifications were made to conform to prior period amounts to current presentation.
Loans, net of unearned income, are summarized as follows by portfolio segment:
(In thousands)December 31, 2023December 31, 2022
Commercial real estate (1)
CRE Nonowner Occupied$1,149,553 $1,184,306 
CRE Owner Occupied629,904 488,551 
Multifamily309,059 197,620 
Farmland212,690 182,457 
Total Commercial real estate2,301,206 2,052,934 
Commercial and industrial
675,079 596,042 
Construction
Residential Construction92,843 90 
Other Construction362,624 441,156 
Total Construction455,467 441,246 
Residential mortgage (1)
1-4 Family 1st Lien339,142 305,386 
1-4 Family Rental341,937 — 
HELOC and Junior Liens132,795 110,835 
Total Residential Mortgage813,874 416,221 
Consumer7,166 7,676 
Total loans$4,252,792 $3,514,119 
(1) In accordance with the guidance in FASB ASC Topic 326, Mid Penn redefined its loan portfolio segments and related loan classes based on the level at which risk is monitored within the ACL methodology. As such, $181.9 million of loans were reclassified from Commercial real estate to Residential mortgage upon adoption of CECL on January 1, 2023.

Total loans are stated at the amount of unpaid principal, adjusted for net deferred fees and costs. Net deferred loan fees were $4.2 million and $3.9 million as of December 31, 2023 and 2022, respectively.
Accrued interest receivable is not included in the amortized cost basis of Mid Penn's loans. At December 31, 2023, accrued interest receivable for loans totaled $22.1 million with no related ACL and was reported in other assets on the accompanying Consolidated Balance Sheet.
The Bank has granted loans to certain of its executive officers, directors, and their related interests. The aggregate amount of these loans was $22.0 million and $30.7 million at December 31, 2023 and 2022, respectively. During 2023, $5.5 million of new loans, advances and loans to new related parties were extended and repayments totaled $3.6 million. In addition, for the year ended December 31, 2023 there were $10.8 million of loans that were no longer extended to related parties. None of these loans were past due, in non-accrual status, or restructured at December 31, 2023.
Past Due and Nonaccrual Loans
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 December 31, 2023 and December 31, 2022, are summarized as follows:
(In thousands)30-59
Days Past
Due		60-89
Days Past
Due		Greater
than 90
Days		Total Past
Due		CurrentTotal LoansLoans
Receivable
> 90 Days and
Accruing
December 31, 2023
Commercial real estate$5,073 $682 $2,974 $8,729 $2,292,477 $2,301,206 $— 
Commercial and industrial638 24 1,270 1,932 673,147 675,079 — 
Construction— 270 2,559 2,829 452,638 455,467 — 
Residential mortgage4,648 267 2,518 7,433 806,441 813,874 — 
Consumer41 31 — 72 7,094 7,166 — 
Total$10,400 $1,274 $9,321 $20,995 $4,231,797 $4,252,792 $— 
(In thousands)30-59
Days Past
Due		60-89
Days Past
Due		Greater
than 90
Days		Total Past
Due		CurrentTotal LoansLoans
Receivable
> 90 Days and
Accruing
December 31, 2022
Commercial real estate$1,792 $— $1,438 $3,230 $2,047,167 $2,050,397 $— 
Commercial and industrial1,808 3 1,854 3,665 592,377 596,042 654 
Construction2,258 — — 2,258 438,988 441,246 — 
Residential mortgage3,826 955 670 5,451 409,630 415,081 — 
Consumer44 19 — 63 7,613 7,676 — 
Loans acquired with credit deterioration:
Commercial real estate78 — 826 904 1,633 2,537 — 
Commercial and industrial— — — — — — — 
Construction— — — — — — — 
Residential mortgage223 228 241 692 448 1,140 — 
Consumer— — — — — — — 
Total$10,029 $1,205 $5,029 $16,263 $3,497,856 $3,514,119 $654 
Loans are placed on nonaccrual status when management determines that the full repayment of principal and collection of interest according to contractual terms is no longer likely, generally when the loan becomes 90 days or more past due.
Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of December 31, 2023 and 2022 are summarized as follows:
December 31, 2023December 31, 2022
Non-accrual LoansTotal non-accrual Loans
(In thousands)With a Related AllowanceWithout a Related AllowanceTotal
Commercial real estate$454 $6,133 $6,587 $4,864 
Commercial and industrial1,222 64 1,286 1,222 
Construction— 2,559 2,559 — 
Residential mortgage2 3,782 3,784 2,109 
Consumer— — — 
$1,678 $12,538 $14,216 $8,195 
The amount of interest income recognized on nonaccrual loans was approximately $174 thousand and $124 thousand during the three months ended December 31, 2023 and 2022, respectively. During the years ended December 31, 2023 and 2022, the amount of interest income recognized on nonaccrual loans was approximately $1.2 million and $729 thousand, respectively.
Credit Quality Indicators
Mid Penn categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. On a minimum of a quarterly basis, Mid Penn analyzes loans individually to classify the loans as to their credit risk.
PASS - This type of classification consists of 5 subcategories:    
Nominal Risk / Pass - This loan classification is a credit extension of the highest quality.
Moderate Risk / Pass - This type of classification has strong financial ratios, substantial debt capacity, and low leverage with a very favorable comparison to industry peers or better than average improving trends are necessary to be in this classification.
Good Acceptable Risk / Pass - The Borrower in this rating classification is a reasonable credit risk having financial ratios on par with its peers and demonstrates slightly improving trends over time; they list good quality assets and fairly low leverage plus ample debt capacity.
Marginally Acceptable Risk / Pass - This type of classification has financial ratios and assets that are of above average quality, the leverage is worse than average compared to industry standards; the Borrower should have a good repayment history and possess consistent earnings with some growth.
Weak/Monitor Risk (Watch list) / Pass - This type of classification has financial ratios consistent with industry averages, assets of average quality with ascertainable values, acceptable leverage, moderate capital assets and an acceptable reliance on trade debt.

SPECIAL MENTION - These credits have developing weaknesses deserving extra attention from the lender and lending management. They are currently protected, but potentially weak. The weakness may be, cash flow, leverage, liquidity, management, industry or other factors which may, if not checked or corrected, weaken the asset or inadequately protect the Bank’s credit position at some future date.

SUBSTANDARD - These credit extensions also have well defined weaknesses, which are inadequately protected by the current worth and debt service capacity of the Borrowers or the collateral pledged, if any. The repayment of principal and interest as originally intended can be jeopardized by defined weaknesses related to adverse financial, managerial, economic, market or political conditions.

DOUBTFUL - These credits have definite weaknesses inherent in Substandard loans with added characteristics that are severe enough to make further collection in full highly questionable and improbable based on the current trends.
LOSS. These loans are considered uncollectible and no longer a viable asset of the Bank. They lack an identifiable source of repayment based on an inability to generate sufficient cash flow to service their debt. All trends are negative and the damage to the financial condition of the Borrower can’t be reversed now or in the near future.
The following table presents risk ratings by loan portfolio segment and origination year, which is the year of origination or renewal.
December 31, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized
Cost Basis
(In thousands)20232022202120202019PriorTotal
Commercial real estate
Pass$271,655 $556,801 $386,911 $297,746 $178,434 $528,326 $38,261 $2,258,134 
Special mention194 — — — 6,009 10,482 186 16,871 
Substandard or lower— 5,209 208 3,162 229 17,345 48 26,201 
Total commercial real estate271,849 562,010 387,119 300,908 184,672 556,153 38,495 2,301,206 
Gross charge offs— — — — — (16)— (16)
Net charge offs— — — — — (16)— (16)
Commercial and industrial
Pass158,824 106,714 68,448 29,961 50,206 57,892 188,714 660,759 
Special mention— 89 2,224 — 227 2,200 4,391 9,131 
Substandard or lower— — 662 — — 1,978 2,549 5,189 
Total commercial and industrial158,824 106,803 71,334 29,961 50,433 62,070 195,654 675,079 
Gross charge offs— (100)— (111)— (27)— (238)
Net charge offs— (100)— (111)— (27)— (238)
Construction
Pass153,596 181,214 54,658 22,357 10,247 5,856 23,262 451,190 
Special mention— — — 1,447 — — — 1,447 
Substandard or lower— 573 — — — 2,257 — 2,830 
Total construction153,596 181,787 54,658 23,804 10,247 8,113 23,262 455,467 
Residential mortgage
Performing158,634 153,203 111,610 90,382 27,863 178,898 87,723 808,313 
Non-performing— — 93 1,470 — 3,998 — 5,561 
Total residential mortgage158,634 153,203 111,703 91,852 27,863 182,896 87,723 813,874 
Gross charge offs— — — — — (13)— (13)
Current period recoveries— — — — — 38 — 38 
Net recoveries— — — — — 25 — 25 
Consumer
Performing2,361 754 649 273 223 103 2,803 7,166 
Non-performing— — — — — — — — 
Total consumer2,361 754 649 273 223 103 2,803 7,166 
Gross charge offs(86)— (10)(9)— (30)— (135)
Current period recoveries26 — — 1 — 5 — 32 
Net charge offs(60)— (10)(8)— (25)— (103)
Total
Pass584,075 844,729 510,017 350,064 238,887 592,074 250,237 3,370,083 
Special mention194 89 2,224 1,447 6,236 12,682 4,577 27,449 
Substandard or lower— 5,782 870 3,162 229 21,580 2,597 34,220 
Performing160,995 153,957 112,259 90,655 28,086 179,001 90,526 815,479 
Nonperforming— — 93 1,470 — 3,998 — 5,561 
Total$745,264 $1,004,557 $625,463 $446,798 $273,438 $809,335 $347,937 $4,252,792 
(In thousands)PassSpecial
Mention		SubstandardTotal
December 31, 2022
Commercial real estate$2,018,088 $12,325 $22,521 $2,052,934 
Commercial and industrial582,540 4,212 9,290 596,042 
Construction438,990 2,256 — 441,246 
Residential mortgage409,259 3,104 3,858 416,221 
Consumer7,676 — — 7,676 
Total loans$3,456,553 $21,897 $35,669 $3,514,119 
Mid Penn had no loans classified as "Doubtful" as of December 31, 2023 and 2022. There was $121 thousand and $122 thousand in loans for which formal foreclosure proceedings were in process at December 31, 2023 and 2022, respectively.
PPP loans, net of deferred fees, totaling $1.4 million and $2.6 million as of December 31, 2023 and 2022, respectively, are included in commercial and industrial loans in the tables above. All PPP loans 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 December 31, 2023.
Collateral-Dependent Loans
A financial asset is considered to be collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of financial assets deemed collateral-dependent, Mid Penn elected the practical expedient to estimate expected credit losses based on the collateral’s fair value less cost to sell. In most cases, Mid Penn records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less cost to sell. Substantially all of the collateral supporting collateral-dependent financial assets consists of various types of real estate, including residential properties; commercial properties such as retail centers, office buildings, and lodging; agriculture land; and vacant land.
Allowance for Credit Losses, effective January 1, 2023

Mid Penn’s ACL - loans methodology is based upon guidance within FASB ASC Subtopic 326-20, as well as regulatory guidance from the FDIC, its primary federal regulator. The ACL - loans is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the loan portfolio is continuously monitored by management and is reflected within the ACL - loans. The ACL - loans is an estimate of expected losses inherent within Mid Penn’s existing loan portfolio. The ACL - loans is adjusted through the PCL and reduced by the charge off of loan amounts, net of recoveries.
The loan loss estimation process involves procedures to appropriately consider the unique characteristics of Mid Penn’s loan portfolio segments. When computing allowance levels, credit loss assumptions are estimated using a model that categorizes loan pools based on loss history and other credit trends and risk characteristics, including current conditions and reasonable and supportable forecasts about the future. Evaluations of the portfolio and individual credits are inherently subjective, as they require estimates, assumptions and judgments as to the facts and circumstances of particular situations. Determining the appropriateness of the allowance is complex and requires judgement by management about the effect of matters that are inherently uncertain. In future periods, evaluations of the overall loan portfolio, in light of the factors and forecasts then prevailing, may result in significant changes in the ACL and credit loss expense.
Mid Penn estimates the ACL using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Mid Penn uses a third-party software application to calculate the quantitative portion of the ACL using a methodology and assumptions specific to each loan pool. The qualitative portion of the allowance is based on general economic conditions and other internal and external factors affecting Mid Penn as a whole, as well as specific loans. Factors considered include the following: lending process, concentrations of credit, and credit quality. The quantitative and qualitative portions of the allowance are added together to determine the total ACL, which reflects management’s expectations of future conditions based on reasonable and supportable forecasts.
The methodology for estimating the amount of expected credit losses reported in the ACL has two basic components: a collective, or pooled, component for estimated expected credit losses for pools of loans that share similar risk characteristics, and an asset-specific component involving individual loans that do not share risk characteristics with other
loans and the measurement of expected credit losses for such individual loans. In estimating the ACL for the collective component, loans are segregated into loan pools based on loan purpose codes and similar risk characteristics.
The commercial real estate and residential mortgage loan portfolio segments include loans for both commercial and residential properties that are secured by real estate. The underwriting process for these loans includes analysis of the financial position and strength of both the borrower and, if applicable, guarantor, experience with similar projects in the past, market demand and prospects for successful completion of the proposed project within the established budget and schedule, values of underlying collateral, availability of permanent financing, maximum loan-to-value ratios, minimum equity requirements, acceptable amortization periods and minimum debt service coverage requirements, based on property type. The borrower’s financial strength and capacity to repay their obligations remain the primary focus of underwriting. Financial strength is evaluated based upon analytical tools that consider historical and projected cash flows and performance, in addition to analysis of the proposed project for income-producing properties. Additional support offered by guarantors is also considered when applicable. Ultimate repayment of these loans is sensitive to interest rate changes, general economic conditions, liquidity and availability of long-term financing.
The commercial and industrial loan portfolio segment includes commercial loans made to many types of businesses for various purposes, such as short-term working capital loans that are usually secured by accounts receivable and inventory, equipment and fixed asset purchases that are secured by those assets, and term financing for those within Mid Penn’s geographic markets. Mid Penn’s credit underwriting process for commercial and industrial loans includes analysis of historical and projected cash flows and performance, evaluation of financial strength of both borrowers and guarantors as reflected in current and detailed financial information, and evaluation of underlying collateral to support the credit.
The consumer loan portfolio segment is comprised of loans which are underwritten after evaluating a borrower’s capacity, credit and collateral. Several factors are considered when assessing a borrower’s capacity, including the borrower’s employment, income, current debt, assets and level of equity in the property. Credit is assessed using a credit report that provides credit scores and the borrower’s current and past information about their credit history. Loan-to-value and debt-to-income ratios, loan amount and lien position are also considered in assessing whether to originate a loan. These borrowers are particularly susceptible to downturns in economic trends, such as conditions that negatively affect housing prices and demand and levels of unemployment.
Mid Penn utilizes a DCF method to estimate the quantitative portion of the allowance for credit losses for loan pools. The DCF is based off of historical losses, including peer data, which is correlated to national unemployment and GDP.
The PD and LGD measures are used in conjunction with prepayment data as inputs into the DCF model to calculate the cash flows at the individual loan level. Contractual cash flows based on loan terms are adjusted for PD, LGD and prepayments to derive loss cash flows. These loss cash flows are discounted by the loan’s coupon rate to arrive at the discounted cash flow based quantitative loss. The prepayment studies are updated quarterly by a third-party for each applicable pool.
Mid Penn determined that reasonable and supportable forecasts could be made for a twelve-month period for all of its loan pools. To the extent the lives of the loans in the Loans held for investment (LHFI) portfolio extend beyond this forecast period, Mid Penn uses a reversion period of four quarters and reverts to the historical mean on a straight-line basis over the remaining life of the loans.
Qualitative factors used in the ACL methodology include the following:
•Lending process
•Concentrations of credit
•Peer Group Divergence
The ACL for individual loans, such as non-accrual and PCD, that do not share risk characteristics with other loans is measured as the difference between the discounted value of expected future cash flows, based on the effective interest rate at origination, and the amortized cost basis of the loan, or the net realizable value. The ACL is the difference between the loan’s net realizable value and its amortized cost basis (net of previous charge-offs and deferred loan fees and costs), except for collateral-dependent loans. A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The expected credit loss for collateral-dependent loans is measured as the difference between the amortized cost basis of the loan and the fair value of the collateral, adjusted for the estimated cost to sell. Fair value estimates for collateral-dependent loans are derived from appraised values based on the current market value or the "as is" value of the collateral, normally from recently received and reviewed appraisals. Current appraisals are ordered on a regular basis based on the inspection date or more
often if market conditions necessitate. Appraisals are obtained from state-certified appraisers and are based on certain assumptions, which may include construction or development status and the highest and best use of the property. These appraisals are reviewed by Mid Penn’s Appraisal Review Department to ensure they are acceptable, and values are adjusted down for costs associated with asset disposal. If the calculated expected credit loss is determined to be permanent or not recoverable, the amount of the expected credit loss is charged off.
Mid Penn may also purchase loans or acquire loans through a business combination. At the purchase or acquisition date, loans are evaluated to determine whether there has been more than insignificant credit deterioration since origination. Loans that have experienced more than insignificant credit deterioration since origination are referred to as PCD loans. In its evaluation of whether a loan has experienced more than insignificant deterioration in credit quality since origination, Mid Penn takes into consideration loan grades, past due and nonaccrual status. Mid Penn may also consider external credit rating agency ratings for borrowers and for non-commercial loans, FICO score or band, probability of default levels, and number of times past due. At the purchase or acquisition date, the amortized cost basis of PCD loans is equal to the purchase price and an initial estimate of credit losses. The initial recognition of expected credit losses on PCD loans has no impact on net income. When the initial measurement of expected credit losses on PCD loans is calculated on a pooled loan basis, the expected credit losses are allocated to each loan within the pool. Any difference between the initial amortized cost basis and the unpaid principal balance of the loan represents a noncredit discount or premium, which is accreted (or amortized) into interest income over the life of the loan. Subsequent changes to the ACL on PCD loans are recorded through the PCL. For purchased loans that are not deemed to have experienced more than insignificant credit deterioration since origination and are therefore not deemed PCD, any discounts or premiums included in the purchase price are accreted (or amortized) over the contractual life of the individual loan.
Loans are charged off against the ACL, with any subsequent recoveries credited back to the ACL account. Expected recoveries may not exceed the aggregate of amounts previously charged off and expected to be charged off.
The following table presents the activity in the ACL - loans as calculated under the CECL methodology by portfolio segment for the twelve months ended December 31, 2023:
(In thousands)Balance at
December 31, 2022		CECL ImpactPCD LoansCharge offsRecoveriesNet loans (charged off) recovered
Provision for credit losses (1)
Balance at
December 31, 2023
Commercial Real Estate
CRE Nonowner Occupied$8,284 $259 $312 $— $— $— $1,412 $10,267 
CRE Owner Occupied2,916 91 2 (16)— (16)2,653 5,646 
Multifamily1,111 35 — — — — 1,056 2,202 
Farmland831 26 — — — — 1,207 2,064 
Commercial and industrial4,593 6,601 5 (238)— (238)(3,830)7,131 
Construction
Residential Construction— 1,270 12 — — — (26)1,256 
Other Construction— 1,931 1 — — — 214 2,146 
Residential Mortgage
1-4 Family 1st Lien370 1,307 4 (13)7 (6)(468)1,207 
1-4 Family Rental288 731 — — 31 31 809 1,859 
HELOC and Junior Liens661 (230)— — — — (42)389 
Consumer29 154 — (135)32 (103)(60)20 
Unallocated(126)(244)— — — — 370 — 
Total$18,957 $11,931 $336 $(402)$70 $(332)$3,295 $34,187 
(1) Includes a $2.0 million initial provision for credit losses on non-PCD loans acquired in the Brunswick Acquisition
The following table presents the ACL for loans and the amortized cost basis of the loans by the measurement methodology used as of December 31, 2023:
(In thousands)ACL - LoansLoans
December 31, 2023Collectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal ACL - LoansCollectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal Loans
Commercial real estate
CRE Nonowner Occupied$9,906 $361 $10,267 $1,145,048 $4,505 $1,149,553 
CRE Owner Occupied5,646 5,646 627,995 1,909 629,904 
Multifamily2,190 12 2,202 308,886 173 309,059 
Farmland2,064 2,064 212,690 212,690 
Commercial and industrial6,419 712 7,131 673,793 1,286 675,079 
Construction
Residential Construction1,256 1,256 92,270 573 92,843 
Other Construction2,146 2,146 360,368 2,256 362,624 
Residential mortgage
1-4 Family 1st Lien1,207 1,207 337,267 1,875 339,142 
1-4 Family Rental1,857 2 1,859 341,236 701 341,937 
HELOC and Junior Liens389 389 131,587 1,208 132,795 
Consumer20 — 20 7,166 — 7,166 
Total$33,100 $1,087 $34,187 $4,238,306 $14,486 $4,252,792 
Allowance for Credit Losses, prior to January 1, 2023
The following table summarizes the allowance as calculated under the incurred loss methodology and recorded investments in loans receivable:
(In thousands)Commercial
Real Estate		Commercial
and
Industrial		ConstructionResidential
Mortgage		ConsumerUnallocatedTotal
Balance at December 31, 20208,655 3,066 134 936 1 590 13,382 
Loans charged off(1,044)(866)(23)(13)(42)— (1,988)
Recoveries207 13 8 11 19 — 258 
Provisions (credits)1,597 1,226 (81)85 24 94 2,945 
Balance at December 31, 20219,415 3,439 38 1,019 2 684 14,597 
Loans charged off(7)(1)— (26)(97)— (131)
Recoveries128 13 24 4 22 — 191 
Provisions (credits)3,606 1,142 (62)322 102 (810)4,300 
Balance at December 31, 2022$13,142 $4,593 $— $1,319 $29 $(126)$18,957 
Allowance for Loan Losses at December 31, 2022
Collectively evaluated for impairment$13,078 $3,792 $— $1,297 $29 $(126)$18,070 
Individually evaluated for impairment$64 $801 $— $22 $— $— $887 
$13,142 $4,593 $— $1,319 $29 $(126)$18,957 
Loans, Net of Unearned Interest
Collectively evaluated for impairment$2,048,074 $594,820 $441,246 $413,717 $7,676 $— $3,505,533 
Individually evaluated for impairment2,323 1,222 — 1,364 — — 4,909 
Acquired with credit deterioration2,537 — — 1,140 — — 3,677 
$2,052,934 $596,042 $441,246 $416,221 $7,676 $— $3,514,119 
The information presented in the designated internal risk categories by portfolio segment table presented above is not required for periods prior to the adoption of CECL. The following table presents the most comparable required information for the prior period, internal credit risk ratings, for the indicated loan portfolio segments as of December 31, 2022:
(In thousands)PassSpecial
Mention		SubstandardTotal
December 31, 2022
Commercial real estate$2,018,088 $12,325 $22,521 $2,052,934 
Commercial and industrial582,540 4,212 9,290 596,042 
Construction438,990 2,256 — 441,246 
Residential mortgage409,259 3,104 3,858 416,221 
Consumer7,676 — — 7,676 
Total loans$3,456,553 $21,897 $35,669 $3,514,119 
Modifications to Borrowers Experiencing Financial Difficulty
From time to time, we may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in
the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, or a term extension, or a combination thereof, among other things.
Information related to loans modified (by type of modification), whereby the borrower was experiencing financial difficulty at the time of modification as of December 31, 2023, is set forth in the following table:

(In thousands)Interest Only
Term Extension		Combination:
Interest Only and
Term Extension		Total% of Total Class of Financing Receivable
Three months ended December 31, 2023
Commercial real estate$— $— $— $— — %
Commercial and industrial
— — — — — 
Construction— 700 — 700 0.15 
  Total$— $700 $— $700 0.02 %
Year ended December 31, 2023
Commercial real estate$51 $— $180 $231 0.01 %
Commercial and industrial
— 150 — 150 0.02 
Construction— 700 — 700 0.15 
Total$51 $850 $180 $1,081 0.16 %
The financial effects of the interest-only loan modifications reduced the monthly payment amounts for the borrower and the term extensions in the table above added a weighted-average of 2.0 years to the life of the loans, which also reduced the monthly payment amounts for the borrowers.
As of December 31, 2022, 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 2022.
(In thousands)Pre-Modification
Outstanding Recorded Investment		Post-Modification
Outstanding Recorded Investment		Recorded Investment
December 31, 2022
Commercial real estate$851 $815 $109 
Residential mortgage590 590 415 
$1,441 $1,405 $524