Loans and Allowance for Loan and Lease Losses (Tables)

6 Months Ended

Jun. 30, 2016

Loans and Allowance for Loan and Lease Losses [Abstract]

Classes of the Loan Portfolio Summarized by the Aggregate Risk Rating

The classes of the loan portfolio, summarized by the pass rating, (net of deferred fees and costs of $200,000 as of June 30, 2016 and $178,000 as of December 31, 2015), and the classified ratings of special mention, substandard, and doubtful within Mid Penn’s internal risk rating system as of June 30, 2016 and December 31, 2015, are as follows:

(Dollars in thousands)			Special
June 30, 2016	Pass		Mention		Substandard		Doubtful		Total
Commercial and industrial	$	158,254	$	729	$	1,295	$	-	$	160,278
Commercial real estate		398,805		4,254		7,727		-		410,786
Commercial real estate - construction		54,342		1,732		-		-		56,074
Lease financing		565		-		-		-		565
Residential mortgage		102,397		180		1,245		-		103,822
Home equity		34,166		167		246		-		34,579
Consumer		3,049		-		-		-		3,049
	$	751,578	$	7,062	$	10,513	$	-	$	769,153

(Dollars in thousands)			Special
December 31, 2015	Pass		Mention		Substandard		Doubtful		Total
Commercial and industrial	$	158,302	$	1,289	$	670	$	-	$	160,261
Commercial real estate		359,859		2,088		7,517		-		369,464
Commercial real estate - construction		65,665		2,403		-		-		68,068
Lease financing		727		-		-		-		727
Residential mortgage		101,507		475		1,361		-		103,343
Home equity		32,928		261		222		-		33,411
Consumer		3,917		-		-		-		3,917
	$	722,905	$	6,516	$	9,770	$	-	$	739,191

Impaired Loans by Loan Portfolio Class

Impaired loans by loan portfolio class as of June 30, 2016 and December 31, 2015 are summarized as follows:

	June 30, 2016						December 31, 2015
(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	$	9	$	44	$	-	$	14	$	49	$	-
Commercial real estate:
Commercial real estate		935		1,970		-		1,023		2,020		-
Acquired with credit deterioration		951		951		-		931		931		-
Residential mortgage:
Residential mortgage		824		870		-		1,329		1,434		-
Acquired with credit deterioration		370		370		-		400		400		-
Home equity		64		73		-		115		137		-
With an allowance recorded:
Commercial and industrial	$	59	$	63	$	3	$	113	$	128	$	51
Commercial real estate		2,722		2,783		769		1,947		1,981		429
Residential mortgage		-		-		-		32		32		23
Home equity		17		36		2		-		-		-
Total Impaired Loans:
Commercial and industrial	$	68	$	107	$	3	$	127	$	177	$	51
Commercial real estate		4,608		5,704		769		3,901		4,932		429
Residential mortgage		1,194		1,240		-		1,761		1,866		23
Home equity		81		109		2		115		137		-

Average Recorded Investment Of Impaired Loans And Related Interest Income By Loan Portfolio Class

The average recorded investment of impaired loans and related interest income recognized for the three and six months ended June 30, 2016 and June 30, 2015 are summarized as follows:

	Three Months Ended
	June 30, 2016				June 30, 2015
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial:
Commercial and industrial	$	11	$	-	$	28	$	-
Acquired with credit deterioration		-				194		105
Commercial real estate:
Commercial real estate		960		-		1,164		-
Acquired with credit deterioration		943		-		992		347
Residential mortgage:
Residential mortgage		831		7		956		-
Acquired with credit deterioration		377		-		428		-
Home equity		66		-		39
With an allowance recorded:
Commercial and industrial	$	59	$	-	$	578	$	-
Commercial real estate		2,201		-		5,090		-
Residential mortgage		-		-		31		-
Home equity		17		-		202		-
Total Impaired Loans:
Commercial and industrial	$	70	$	-	$	800	$	105
Commercial real estate		4,104		-		7,246		347
Residential mortgage		1,208		7		1,415		-
Home equity		83		-		241		-

	Six Months Ended
	June 30, 2016				June 30, 2015
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial:
Commercial and industrial	$	14	$	-	$	33	$	-
Acquired with credit deterioration		-		-		78		105
Commercial real estate:
Commercial real estate		1,001		-		1,272		-
Acquired with credit deterioration		934		-		397		347
Residential mortgage:
Residential mortgage		777		9		817		-
Acquired with credit deterioration		375		4		171		-
Home equity		53		-		30		-
With an allowance recorded:
Commercial and industrial	$	61	$	-	$	374	$	-
Commercial real estate		1,851		-		5,118		-
Residential mortgage		-		-		13		-
Home equity		19		-		154		-
Total Impaired Loans:
Commercial and industrial	$	75	$	-	$	485	$	105
Commercial real estate		3,786		-		6,787		347
Residential mortgage		1,152		13		1,001		-
Home equity		72		-		184		-

Non-accrual Loans by Classes of the Loan Portfolio

Nonaccrual loans by loan portfolio class as of June 30, 2016 and December 31, 2015 are summarized as follows:

(Dollars in thousands)	June 30, 2016		December 31, 2015
Commercial and industrial	$	9	$	66
Commercial real estate		3,292		2,607
Residential mortgage		598		1,630
Home equity		96		115
	$	3,995	$	4,418

Loan Portfolio Summarized by the Past Due Status

The classes of the loan portfolio summarized by the past due status as of June 30, 2016 and December 31, 2015 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
June 30, 2016	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	-	$	-	$	9	$	9	$	160,269	$	160,278	$	-
Commercial real estate:
Commercial real estate		-		6		2,062		2,068		407,767		409,835		16
Acquired with credit deterioration		-		-		57		57		894		951		57
Commercial real estate - construction		-		-		-		-		56,074		56,074		-
Lease financing		-		-		-		-		565		565		-
Residential mortgage:
Residential mortgage		161		-		126		287		103,165		103,452		-
Acquired with credit deterioration		73		-		218		291		79		370		-
Home equity		-		7		79		86		34,493		34,579		-
Consumer		20		-		-		20		3,029		3,049		-
Total	$	254	$	13	$	2,551	$	2,818	$	766,335	$	769,153	$	73

													Loans
(Dollars in thousands)	30-59		60-89		Greater								Receivable >
	Days Past		Days Past		than 90		Total Past						90 Days and
December 31, 2015	Due		Due		Days		Due		Current		Total Loans		Accruing
Commercial and industrial	$	55	$	204	$	66	$	325	$	159,936	$	160,261	$	-
Commercial real estate:
Commercial real estate		211		608		1,456		2,275		366,258		368,533		-
Acquired with credit deterioration		215		518		55		788		143		931		55
Commercial real estate - construction		-		-		-		-		68,068		68,068		-
Lease financing		-		-		-		-		727		727		-
Residential mortgage:
Residential mortgage		694		550		778		2,022		100,921		102,943		-
Acquired with credit deterioration		12		-		222		234		166		400		-
Home equity		-		50		23		73		33,338		33,411		-
Consumer		10		5		-		15		3,902		3,917		-
Total	$	1,197	$	1,935	$	2,600	$	5,732	$	733,459	$	739,191	$	55

Allowance for Loan Losses and Recorded Investment in Financing Receivables

The following tables summarize the allowance for loan and lease losses and recorded investments in loans receivable.

(Dollars in thousands)
As of, and for the periods ended, June 30, 2016	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Beginning balance,
April 1, 2016	$	1,427	$	3,777	$	119	$	1	$	516	$	303	$	9	$	287	$	6,439
Charge-offs		-		(54)		-		-		-		(25)		(7)		-		(86)
Recoveries		1		136		-		-		25		-		2		-		164
Provisions		(56)		382		1		-		(20)		47		5		36		395
Ending balance,
June 30, 2016	$	1,372	$	4,241	$	120	$	1	$	521	$	325	$	9	$	323	$	6,912

	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2016	$	1,393	$	3,552	$	153	$	1	$	534	$	317	$	12	$	206	$	6,168
Charge-offs		-		(150)		-		-		-		(25)		(10)		-		(185)
Recoveries		2		161		-		-		25		-		6		-		194
Provisions		(23)		678		(33)		-		(38)		33		1		117		735
Ending balance,
June 30, 2016		1,372	$	4,241	$	120	$	1	$	521	$	325	$	9	$	323	$	6,912
Ending balance:
individually evaluated for impairment		3		769		-		-		-		2		-		-		774
Ending balance:
collectively evaluated for impairment	$	1,369	$	3,472	$	120	$	1	$	521	$	323	$	9	$	323	$	6,138
Loans receivables:
Ending balance	$	160,278	$	410,786	$	56,074	$	565	$	103,822	$	34,579	$	3,049	$	-	$	769,153
Ending balance:
individually evaluated for impairment		68		3,657		-		-		824		81		-		-		4,630
Ending balance:
acquired with credit deterioration		-		951		-		-		370		-		-		-		1,321
Ending balance:
collectively evaluated for impairment	$	160,210	$	406,178	$	56,074	$	565	$	102,628	$	34,498	$	3,049	$	-	$	763,202

(Dollars in thousands)
As of, and for the periods ended, June 30, 2015	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Beginning balance,
April 1, 2015	$	1,639	$	3,626	$	35	$	1	$	544	$	519	$	37	$	165	$	6,566
Charge-offs		-		(55)		-		-		-		-		(6)		-		(61)
Recoveries		-		41		-		-		-		-		5		-		46
Provisions		109		279		5		1		(63)		92		4		(127)		300
Ending balance,
June 30, 2015	$	1,748	$	3,891	$	40	$	2	$	481	$	611	$	40	$	38	$	6,851

	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2015	$	1,393	$	3,925	$	33	$	2	$	450	$	653	$	35	$	225	$	6,716
Charge-offs		-		(505)		-		-		(1)		(29)		(11)		-		(546)
Recoveries		-		43		-		-		-		29		9		-		81
Provisions		355		428		7		-		32		(42)		7		(187)		600
Ending balance,
June 30, 2015		1,748		3,891		40		2		481		611		40		38		6,851
Ending balance:
individually evaluated for impairment		219		1,367		-		-		23		134		-		-		1,743
Ending balance:
collectively evaluated for impairment	$	1,529	$	2,524	$	40	$	2	$	458	$	477	$	40	$	38	$	5,108
Loans receivables:
Ending balance	$	162,783	$	339,877	$	66,477	$	925	$	98,833	$	32,839	$	3,418	$	-	$	705,152
Ending balance:
individually evaluated for impairment		603		6,197		-		-		1,008		237		-		-		8,045
Ending balance:
acquired with credit deterioration		198		929		-		-		430		-		-		-		1,557
Ending balance:
collectively evaluated for impairment	$	161,982	$	332,751	$	66,477	$	925	$	97,395	$	32,602	$	3,418	$	-	$	695,550

(Dollars in thousands)
December 31, 2015	Commercial and industrial		Commercial real estate		Commercial real estate - construction		Lease financing		Residential mortgage		Home equity		Consumer		Unallocated		Total
Allowance for loan and lease losses:
Ending balance	$	1,393	$	3,552	$	153	$	1	$	534	$	317	$	12	$	206	$	6,168
Ending balance:
individually evaluated for impairment		51		429		-		-		23		-		-		-		503
Ending balance:
collectively evaluated for impairment	$	1,342	$	3,123	$	153	$	1	$	511	$	317	$	12	$	206	$	5,665
Loans receivable:
Ending balance	$	160,261	$	369,464	$	68,068	$	727	$	103,343	$	33,411	$	3,917	$	-	$	739,191
Ending balance:
individually evaluated for impairment		127		2,970		-		-		1,361		115		-		-		4,573
Ending balance:
acquired with credit deterioration		-		931		-		-		400		-		-		-		1,331
Ending balance:
collectively evaluated for impairment	$	160,134	$	365,563	$	68,068	$	727	$	101,582	$	33,296	$	3,917	$	-	$	733,287

Troubled Debt Restructurings

The recorded investments in troubled debt restructured loans at June 30, 2016 and December 31, 2015 are as follows:

(Dollars in thousands)	Pre-Modification		Post-Modification
June 30, 2016	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	40	$	35	$	9
Commercial real estate		3,634		3,117		2,107
Residential mortgage		733		727		584
	$	4,407	$	3,879	$	2,700

(Dollars in thousands)	Pre-Modification		Post-Modification
December 31, 2015	Outstanding Recorded Investment		Outstanding Recorded Investment		Recorded Investment
Commercial and industrial	$	40	$	35	$	15
Commercial real estate		3,634		3,117		2,235
Residential mortgage		733		727		555
	$	4,407	$	3,879	$	2,805

Schedule of Accretion of Purchased Impaired Loan

The following table provides activity for the accretable yield of acquired impaired loans for the three and six months ended June 30, 2016.

(Dollars in thousands)
Accretable yield, April 1, 2016	$	174
Accretable yield amortized to interest income		(31)
Reclassification from nonaccretable difference (a)		-
Accretable yield, June 30, 2016	$	143

(Dollars in thousands)
Accretable yield, January 1, 2016	$	178
Accretable yield amortized to interest income		(65)
Reclassification from nonaccretable difference (a)		30
Accretable yield, June 30, 2016	$	143

(a) Reclassification from non-accretable difference represents an increase to the estimated cash flows to be collected on the underlying portfolio.