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Loans and Allowance for Credit Losses - Loans (Tables)
 6 Months Ended
Jun. 30, 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)June 30, 2023December 31, 2022
Commercial real estate (1)
$2,145,272 $2,052,934 
Commercial and industrial
635,929 596,042 
Construction
515,398 441,246 
Residential mortgage (1)
730,176 416,221 
Consumer7,735 7,676 
Total loans$4,034,510 $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 presents risk ratings by loan portfolio segment and origination year, which is the year of origination or renewal.
June 30, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized
Cost Basis
(In thousands)20232022202120202019PriorTotal
Commercial real estate
Pass$154,942 $543,710 $325,310 $296,602 $194,714 $561,115 $31,100 $2,107,493 
Special mention— — — — — 13,246 — 13,246 
Substandard or lower201 2,268 — 3,206 2,193 13,537 3,128 24,533 
Total commercial real estate155,143 545,978 325,310 299,808 196,907 587,898 34,228 2,145,272 
Gross charge offs— — — — — (16)— (16)
Net charge offs— — — — — (16)— (16)
Commercial and industrial
Pass87,344 115,946 86,019 33,854 54,005 65,412 174,518 617,098 
Special mention— 171 892 — — 2,294 4,296 7,653 
Substandard or lower— 150 — — 5,899 1,849 3,280 11,178 
Total commercial and industrial87,344 116,267 86,911 33,854 59,904 69,555 182,094 635,929 
Gross charge offs— (100)— (111)— (9)— (220)
Net charge offs— (100)— (111)— (9)— (220)
Construction
Pass63,195 198,348 152,167 39,314 10,295 14,754 33,377 511,450 
Special mention— — — — — — 1,692 1,692 
Substandard or lower— — — — — 2,256 — 2,256 
Total construction63,195 198,348 152,167 39,314 10,295 17,010 35,069 515,398 
Residential mortgage
Performing102,765 136,479 90,145 90,748 30,485 197,858 78,572 727,052 
Non-performing— — 38 227 20 2,824 15 3,124 
Total residential mortgage102,765 136,479 90,183 90,975 30,505 200,682 78,587 730,176 
Gross charge offs— — — — — (4)— (4)
Current period recoveries— — — — — 30 — 30 
Net recoveries— — — — — 26 — 26 
Consumer
Performing1,238 980 877 365 287 437 3,551 7,735 
Non-performing— — — — — — — — 
Total consumer1,238 980 877 365 287 437 3,551 7,735 
Gross charge offs(56)— (3)(4)— (21)— (84)
Current period recoveries11 — — — — — — 11 
Net charge offs(45)— (3)(4)— (21)— (73)
Total
Pass$305,481 $858,004 $563,496 $369,770 $259,014 $641,281 $238,995 $3,236,041 
Special mention— 171 892 — — 15,540 5,988 22,591 
Substandard or lower201 2,418 — 3,206 8,092 17,642 6,408 37,967 
Performing104,003 137,459 91,022 91,113 30,772 198,295 82,123 734,787 
Nonperforming— — 38 227 20 2,824 15 3,124 
Total$409,685 $998,052 $655,448 $464,316 $297,898 $875,582 $333,529 $4,034,510 
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 June 30, 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
June 30, 2023
Commercial real estate$3,688 $— $3,097 $6,785 $2,138,487 $2,145,272 $1 
Commercial and industrial2,985 — 1,543 4,528 631,401 635,929 1 
Construction— — 2,257 2,257 513,141 515,398 — 
Residential mortgage3,209 106 1,779 5,094 725,082 730,176 7 
Consumer15 3 — 18 7,717 7,735 — 
Total$9,897 $109 $8,676 $18,682 $4,015,828 $4,034,510 $9 
(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 June 30, 2023 and December 31, 2022 are summarized as follows:
June 30, 2023December 31, 2022
Non-accrual LoansTotal non-accrual Loans
(In thousands)With a Related AllowanceWithout a Related AllowanceTotal
Commercial real estate$466 $8,079 $8,545 $4,864 
Commercial and industrial1,329 214 1,543 1,222 
Construction— 2,256 2,256 — 
Residential mortgage2 3,122 3,124 1,698 
Consumer— — — 411 
$1,797 $13,671 $15,468 $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 and six months ended June 30, 2023:
(In thousands)Commercial real estateCommercial and industrialConstruction Residential mortgageConsumerTotal
Balance at March 31, 2023$13,312 $11,269 $3,631 $2,874 $179 $31,265 
Purchase credit deteriorated loans314 5 13 4 — 336 
Loans charged off— (109)— — (65)(174)
Recoveries— — — — 4 4 
Net loans (charged off) recovered — (109)— — (61)(170)
Provision for credit losses (1)
571 238 23 267 58 1,157 
Balance at June 30, 2023$14,197 $11,403 $3,667 $3,145 $176 $32,588 
(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 
Purchase credit deteriorated loans314 5 13 4 — — 336 
Loans charged off(16)(220)— (4)(84)— (324)
Recoveries— — — 30 11 — 41 
Net loans (charged off) recovered(16)(220)— 26 (73)— (283)
Provision for credit losses (1)
469 425 453 234 66 — 1,647 
Balance at June 30, 2023$14,197 $11,403 $3,667 $3,145 $176 $— $32,588 
(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 June 30, 2023:
(In thousands)ACL - LoansLoans
June 30, 2023Collectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal ACL - LoansCollectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal Loans
Commercial Real Estate$13,945 $252 $14,197 $2,136,727 $8,545 $2,145,272 
Commercial & Industrial 10,686 717 11,403 634,386 1,543 635,929 
Construction 3,667 — 3,667 513,142 2,256 515,398 
Residential Mortgage3,143 2 3,145 726,674 3,502 730,176 
Consumer176 — 176 7,735 — 7,735 
Total$31,617 $971 $32,588 $4,018,664 $15,846 $4,034,510 
The following table summarizes the allowance and recorded investments in loans receivable:
(In thousands)
As of, and for the
three months ended,
June 30, 2022		Commercial Real EstateCommercial and industrialConstructionResidential mortgageConsumer Unallocated Total
Allowance for loan and lease losses:
April 1, 2022$9,991 $3,811 $41 $1,045 $2 $257 $15,147 
Charge-offs— — — — (9)— (9)
Recoveries— — — 3 10 — 13 
Provisions 2,000 (140)5 95 (1)(234)1,725 
June 30, 202211,991 3,671 46 1,143 2 23 16,876 
Individually evaluated for impairment892 118 — — — — 1,010 
Collectively evaluated for impairment$11,099 $3,553 $46 $1,143 $2 $23 $15,866 
(In thousands)
As of, and for the
six months ended,
June 30, 2022		Commercial Real EstateCommercial and industrialConstructionResidential mortgageConsumerUnallocatedTotal
Allowance for loan and lease losses:
January 1, 2022$9,415 $3,439 $38 $1,019 $2 $684 $14,597 
Charge-offs— — — — (66)— (66)
Recoveries65 13 24 4 14 — 120 
Provisions2,511 219 (16)120 52 (661)2,225 
June 30, 202211,991 3,671 46 1,143 2 23 16,876 
Individually evaluated for impairment892 118 — — — — 1,010 
Collectively evaluated for impairment$11,099 $3,553 $46 $1,143 $2 $23 $15,866 
Loans Receivable
Ending Balance$1,825,944 $549,881 $376,117 $418,815 $9,276 $— $3,180,033 
Individually Evaluated for impairment2,106 507 — 1,413 — — 4,026 
Acquired with credit deterioration2,109 — 1,221 1,370 — — 4,700 
$1,821,729 $549,374 $374,896 $416,032 $9,276 $— $3,171,307 
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)June 30, 2023
Balance, January 31, 2023$85 
Impact of adopting CECL3,077 
PCL - OBS exposure340 
Balance, March 31, 20233,502 
PCL - OBS exposure289 
Balance, June 30, 2023$3,791 
Troubled Debt Restructurings
Information related to loans modified (by type of modification), whereby the borrower was experiencing financial difficulty at the time of modification, 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 June 30, 2023
Commercial and industrial
$— $150 $— $150 0.02 %
  Total$— $150 $— $150 0.02 %
Six months ended June 30, 2023
Commercial real estate$51 $— $180 $231 0.01 %
Commercial and industrial
— 150 — 150 0.02 
Total$51 $150 $180 $381 0.01 %