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Loans and Allowance for Credit Losses - Loans (Tables)
 3 Months Ended
Mar. 31, 2023
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Financing Receivable Credit Quality Indicators
Loans, net of unearned income, are summarized as follows by portfolio segment:
(In thousands)March 31, 2023December 31, 2022
Commercial real estate (1)
$1,899,168 $2,052,934 
Commercial and industrial
605,610 596,042 
Construction
486,172 441,246 
Residential mortgage (1)
612,427 416,221 
Consumer7,970 7,676 
Total loans$3,611,347 $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. Prior periods were not reclassified.
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. The following table present risk ratings by loan portfolio segment and origination year, which is the year of origination or renewal.
March 31, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized
Cost Basis
(In thousands)20232022202120202019PriorTotal
Commercial real estate
Pass$68,074 $500,219 $287,476 $279,492 $185,711 $521,638 $28,383 $1,870,993 
Special mention— — — — — 8,952 — 8,952 
Substandard or lower— — — 1,148 988 16,794 293 19,223 
Total commercial real estate68,074 500,219 287,476 280,640 186,699 547,384 28,676 1,899,168 
Gross charge offs— — — — — (16)— (16)
Net charge offs— — — — — (16)— (16)
Commercial and industrial
Pass43,415 120,182 91,301 42,947 54,784 65,984 171,458 590,071 
Special mention— 352 43 — — 2,366 3,630 6,391 
Substandard or lower— — — — 6,122 1,931 1,095 9,148 
Total commercial and industrial43,415 120,534 91,344 42,947 60,906 70,281 176,183 605,610 
Gross charge offs— — — (111)— — — (111)
Net charge offs— — — (111)— — — (111)
Construction
Pass24,152 185,866 164,384 49,764 11,076 21,531 27,143 483,916 
Special mention— — — — — — — — 
Substandard or lower— — — — — 2,256 — 2,256 
Total construction24,152 185,866 164,384 49,764 11,076 23,787 27,143 486,172 
Residential mortgage
Performing33,493 123,202 75,607 81,379 23,143 196,827 75,607 609,258 
Non-performing— — — 211 — 2,942 16 3,169 
Total residential mortgage33,493 123,202 75,607 81,590 23,143 199,769 75,623 612,427 
Gross charge offs— — — — — (4)— (4)
Current period recoveries— — — — — 30 — 30 
Net recoveries— — — — — 26 — 26 
Consumer
Performing342 1,160 982 449 327 1,221 3,489 7,970 
Non-performing— — — — — — — — 
Total consumer342 1,160 982 449 327 1,221 3,489 7,970 
Gross charge offs(16)— (3)— — — — (19)
Current period recoveries7 — — — — — — 7 
Net charge offs(9)— (3)— — — — (12)
Total
Pass$135,641 $806,267 $543,161 $372,203 $251,571 $609,153 $226,984 $2,944,980 
Special mention— 352 43 — — 11,318 3,630 15,343 
Substandard or lower— — — 1,148 7,110 20,981 1,388 30,627 
Performing33,835 124,362 76,589 81,828 23,470 198,048 79,096 617,228 
Nonperforming— — — 211 — 2,942 16 3,169 
Total$169,476 $930,981 $619,793 $455,390 $282,151 $842,442 $311,114 $3,611,347 
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 
Loan Portfolio Summarized by the Past Due Status
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 March 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
March 31, 2023
Commercial real estate$1,849 $60 $3,000 $4,909 $1,894,259 $1,899,168 $— 
Commercial and industrial616 148 1,434 2,198 603,412 605,610 — 
Construction1,580 — 2,257 3,837 482,335 486,172 — 
Residential mortgage3,367 125 1,959 5,451 606,976 612,427 7 
Consumer40 1 — 41 7,929 7,970 — 
Total$7,452 $334 $8,650 $16,436 $3,594,911 $3,611,347 $7 
(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 
Non-accrual Loans by Classes of the Loan Portfolio Including Loans Acquired With Credit Deterioration Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of March 31, 2023 and December 31, 2022 are summarized as follows:
March 31, 2023December 31, 2022
Non-accrual LoansTotal non-accrual Loans
(In thousands)With a Related AllowanceWithout a Related AllowanceTotal
Commercial real estate$462 $6,202 $6,664 $4,864 
Commercial and industrial1,241 193 1,434 1,222 
Construction— 2,257 2,257 — 
Residential mortgage96 2,812 2,908 1,698 
Consumer— 262 262 411 
$1,799 $11,726 $13,525 $8,195 
Allowance and Recorded Investment in Financing Receivables
The following table presents the activity in the ACL - loans by portfolio segment for the three months ended March 31, 2023:
(In thousands)Commercial real estateCommercial and industrialConstruction Residential mortgageConsumerUnallocatedTotal
Balance at December 31, 2022$13,142 $4,593 $— $1,319 $29 $(126)$18,957 
Impact of adopting CECL288 6,600 3,201 1,562 154 126 11,931 
Loans charged off(16)(111)— (4)(19)— (150)
Recoveries— — — 30 7 — 37 
Net loans (charged off) recovered (16)(111)— 26 (12)— (113)
Provision for credit losses(102)187 430 (33)8 — 490 
Balance at March 31, 2023$13,312 $11,269 $3,631 $2,874 $179 $— $31,265 
The following table presents the ACL for loans and the amortized cost basis of the loans by the measurement methodology used as of March 31, 2023:
(In thousands)ACL - LoansLoans
March 31, 2023Collectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal ACL - LoansCollectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal Loans
Commercial Real Estate$13,175 $137 $13,312 $1,892,504 $6,664 $1,899,168 
Commercial & Industrial 10,587 682 11,269 604,176 1,434 605,610 
Construction 3,631 — 3,631 483,916 2,256 486,172 
Residential Mortgage2,868 6 2,874 608,872 3,555 612,427 
Consumer179 — 179 7,970 — 7,970 
Total$30,440 $825 $31,265 $3,597,438 $13,909 $3,611,347 
The following table summarizes the allowance and recorded investments in loans receivable:
(In thousands)
As of, and for the
three months ended,
March 31, 2022		Commercial Real EstateCommercial and industrialConstructionResidential mortgageConsumer Unallocated Total
Allowance for loan and lease losses:
Beginning balance,
January 1, 2022$9,415 $3,439 $38 $1,019 $2 $684 $14,597 
Charge-offs— — — — (57)— (57)
Recoveries65 13 24 1 4 — 107 
Provisions 511 359 (21)25 53 (427)500 
Ending balance, March 31, 20229,991 3,811 41 1,045 2 257 15,147 
Individually evaluated for impairment114 75 — — — — 189 
Collectively evaluated for impairment$9,877 $3,736 $41 $1,045 $2 $257 $14,958 
Loans Receivable
Ending Balance$1,722,668 $586,444 $382,131 $418,830 $11,458 $— $3,121,531 
Individually Evaluated for impairment1,101 523 — 1,437 — — 3,061 
Acquired with credit deterioration2,109 — 1,221 1,370 — — 4,700 
$1,719,458 $585,921 $380,910 $416,023 $11,458 $— $3,113,770 
Financing Receivable, Allowance for Credit Loss Related to Off-Balance Sheet Credit Exposures
Changes in the ACL on OBS credit exposures were as follows for the period presented:
(In thousands)March 31, 2023
Balance, January 1, 2023$85 
Impact of adopting CECL3,077 
PCL - OBS exposure340 
Balance, March 31, 2023$3,502 
Troubled Debt Restructurings
Information as of or for the three months ended March 31, 2023 related to loans modified (by type of modification) in the preceding twelve months, respectively, whereby the borrower was experiencing financial difficulty at the time of modification, is set forth in the following table:
(In thousands)Interest OnlyCombination:
Interest Only and
Term Extension
March 31, 2023
Commercial real estate$51 $180 
$51 $180