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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2015
Fair Value Measurement [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, 2015 using:

(Dollars in thousands)

 

Total carrying value at

 

Quoted prices in active markets

 

Significant other observable inputs

 

Significant unobservable inputs

Assets:

 

December 31, 2015

 

(Level 1)

 

(Level 2)

 

(Level 3)

U.S. Treasury and U.S. government agencies

 

$

 26,990 

 

$

 -

 

$

 26,990 

 

$

 -

Mortgage-backed U.S. government agencies

 

 

 38,804 

 

 

 -

 

 

 38,804 

 

 

 -

State and political subdivision obligations

 

 

 66,617 

 

 

 -

 

 

 66,617 

 

 

 -

Equity securities

 

 

 3,310 

 

 

 1,240 

 

 

 2,070 

 

 

 -

 

 

$

 135,721 

 

$

 1,240 

 

$

 134,481 

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value measurements at December 31, 2014 using:

(Dollars in thousands)

 

Total carrying value at

 

Quoted prices in active markets

 

Significant other observable inputs

 

Significant unobservable inputs

Assets:

 

December 31, 2014

 

(Level 1)

 

(Level 2)

 

(Level 3)

U.S. Treasury and U.S. government agencies

 

$

 27,066 

 

$

 -

 

$

 27,066 

 

$

 -

Mortgage-backed U.S. government agencies

 

 

 33,776 

 

 

 -

 

 

 33,776 

 

 

 -

State and political subdivision obligations

 

 

 79,171 

 

 

 -

 

 

 79,171 

 

 

 -

Equity securities

 

 

 1,621 

 

 

 561 

 

 

 1,060 

 

 

 -

 

 

$

 141,634 

 

$

 561 

 

$

 141,073 

 

$

 -

 

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, 2015 using:

(Dollars in thousands)

 

Total carrying value at

 

Quoted prices in active markets

 

Significant other observable inputs

 

Significant unobservable inputs

Assets:

 

December 31, 2015

 

(Level 1)

 

(Level 2)

 

(Level 3)

Impaired Loans

 

$

 2,088 

 

$

 -

 

$

 -

 

$

 2,088 

Foreclosed Assets Held for Sale

 

 

 453 

 

 

 -

 

 

 -

 

 

 453 

Mortgage Servicing Rights

 

 

 174 

 

 

 -

 

 

 -

 

 

 174 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value measurements at December 31, 2014 using:

(Dollars in thousands)

 

Total carrying value at

 

Quoted prices in active markets

 

Significant other observable inputs

 

Significant unobservable inputs

Assets:

 

December 31, 2014

 

(Level 1)

 

(Level 2)

 

(Level 3)

Impaired Loans

 

$

 6,664 

 

$

 -

 

$

 -

 

$

 6,664 

Foreclosed Assets Held for Sale

 

 

 142 

 

 

 -

 

 

 -

 

 

 142 

Mortgage Servicing Rights

 

 

 187 

 

 

 -

 

 

 -

 

 

 187 

 

Fair Value Inputs, Assets, Quantitative Information

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, 2015

 

Fair Value Estimate

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average

Impaired Loans

 

$

 2,088 

 

Appraisal of collateral (1)

 

Appraisal adjustments (2)

 

11% - 60% 

 

30%

Foreclosed Assets Held for Sale

 

 

 453 

 

Appraisal of collateral (1), (3)

 

Appraisal adjustments (2)

 

17% - 27% 

 

26%

Mortgage Servicing Rights

 

 

 174 

 

Multiple of annual service fee

 

Estimated prepayment speed based on rate and term

 

210% - 400% 

 

360%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

Quantitative Information about Level 3 Fair Value Measurements

December 31, 2014

 

Fair Value Estimate

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average

Impaired Loans

 

$

 6,664 

 

Appraisal of collateral (1)

 

Appraisal adjustments (2)

 

10% - 95% 

 

32%

Foreclosed Assets Held for Sale

 

 

 142 

 

Appraisal of collateral (1), (3)

 

Appraisal adjustments (2)

 

15% - 40% 

 

27%

Mortgage Servicing Rights

 

 

 187 

 

Multiple of annual service fee

 

Estimated prepayment speed based on rate and term

 

210% - 400% 

 

353%

 

(1)

Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various level 3 inputs which are not observable.

(2)

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.

(3)

Includes qualitative adjustments by management and estimated liquidation expenses.
Fair Value, by Balance Sheet Grouping

The following table summarizes the carrying value and fair value of financial instruments at December 31, 2015 and 2014.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

December 31, 2015

 

December 31, 2014

 

Carrying

 

Fair

 

Carrying

 

Fair

 

Value

 

Value

 

Value

 

Value

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 13,284 

 

$

 13,284 

 

$

 9,882 

 

$

 9,882 

Interest-bearing time balances with other financial institutions

 

 4,317 

 

 

 4,317 

 

 

 5,772 

 

 

 5,772 

Available for sale investment securities

 

 135,721 

 

 

 135,721 

 

 

 141,634 

 

 

 141,634 

Net loans and leases

 

 733,023 

 

 

 738,773 

 

 

 564,817 

 

 

 572,487 

Restricted investment in bank stocks

 

 4,266 

 

 

 4,266 

 

 

 3,181 

 

 

 3,181 

Accrued interest receivable

 

 3,813 

 

 

 3,813 

 

 

 3,058 

 

 

 3,058 

Mortgage servicing rights

 

 174 

 

 

 174 

 

 

 187 

 

 

 187 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

 777,043 

 

$

 777,320 

 

$

 637,922 

 

$

 639,226 

Short-term borrowings

 

 31,596 

 

 

 31,596 

 

 

 578 

 

 

 578 

Long-term debt

 

 40,305 

 

 

 39,626 

 

 

 52,961 

 

 

 52,514 

Subordinated debt

 

 7,500 

 

 

 7,500 

 

 

 

 

 

 

Accrued interest payable

 

 390 

 

 

 390 

 

 

 349 

 

 

 349 

 

 

 

 

 

 

 

 

 

 

 

 

Off-balance sheet financial instruments:

 

 

 

 

 

 

 

 

 

 

 

Commitments to extend credit

$

 -

 

$

 -

 

$

 -

 

$

 -

Financial standby letters of credit

 

 -

 

 

 -

 

 

 -

 

 

 -

 

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, 2015 and 2014.  Carrying values approximate fair values for cash and cash equivalents, interest-bearing time balances with other financial institutions, restricted investment in bank stocks, mortgage servicing rights, accrued interest receivable and payable, short-term borrowings, and subordinated debt.  Other than cash and cash equivalents, which are considered Level 1 Inputs, these instruments are 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

 

 

 

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

 

 

 

 

 

in Active Markets

 

 

 

Significant

(Dollars in thousands)

 

 

 

 

 

 

 

for Identical Assets

 

Significant Other

 

Unobservable

 

 

Carrying

 

 

 

 

or Liabilities

 

Observable Inputs

 

Inputs

December 31, 2015

 

Amount

 

Fair Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

Financial instruments - assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loans and leases

 

$

 733,023 

 

$

 738,773 

 

$

 -

 

$

 -

 

$

 738,773 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments - liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

 777,043 

 

$

 777,320 

 

$

 -

 

$

 777,320 

 

$

 -

Long-term debt

 

 

 40,305 

 

 

 39,626 

 

 

 -

 

 

 39,626 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

 

 

 

 

 

in Active Markets

 

 

 

Significant

(Dollars in thousands)

 

 

 

 

 

 

 

for Identical Assets

 

Significant Other

 

Unobservable

 

 

Carrying

 

 

 

 

or Liabilities

 

Observable Inputs

 

Inputs

December 31, 2014

 

Amount

 

Fair Value

 

(Level 1)

 

(Level 2)

 

(Level 3)

Financial instruments - assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loans and leases

 

$

 564,817 

 

$

 572,487 

 

$

 -

 

$

 -

 

$

 572,487 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments - liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

 637,922 

 

$

 639,226 

 

$

 -

 

$

 639,226 

 

$

 -

Long-term debt

 

 

 52,961 

 

 

 52,514 

 

 

 -

 

 

 52,514 

 

 

 -