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Loans and Allowance for Credit Losses - Loans (Tables)
 9 Months Ended
Sep. 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)September 30, 2023December 31, 2022
Commercial real estate (1)
$2,288,396 $2,052,934 
Commercial and industrial
648,439 596,042 
Construction
462,215 441,246 
Residential mortgage (1)
743,533 416,221 
Consumer3,074 7,676 
Total loans$4,145,657 $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.
September 30, 2023
Term Loans Amortized Cost Basis by Origination YearRevolving Loans Amortized
Cost Basis
(In thousands)20232022202120202019PriorTotal
Commercial real estate
Pass$230,714 $555,982 $391,929 $303,897 $188,508 $545,699 $35,339 $2,252,068 
Special mention200 — 210 — — 16,825 190 17,425 
Substandard or lower— 5,241 — 3,176 230 10,208 48 18,903 
Total commercial real estate230,914 561,223 392,139 307,073 188,738 572,732 35,577 2,288,396 
Gross charge offs— — — — — (16)— (16)
Net charge offs— — — — — (16)— (16)
Commercial and industrial
Pass110,268 111,429 75,748 31,053 52,412 62,133 192,538 635,581 
Special mention— 141 786 — — 2,652 5,055 8,634 
Substandard or lower— 150 — — — 1,587 2,487 4,224 
Total commercial and industrial110,268 111,720 76,534 31,053 52,412 66,372 200,080 648,439 
Gross charge offs— (100)— (111)— (9)— (220)
Net charge offs— (100)— (111)— (9)— (220)
Construction
Pass104,753 214,316 84,231 22,267 10,282 6,395 15,441 457,685 
Special mention— 573 — 1,700 — — — 2,273 
Substandard or lower— — — — — 2,257 — 2,257 
Total construction104,753 214,889 84,231 23,967 10,282 8,652 15,441 462,215 
Residential mortgage
Performing129,139 132,888 87,794 93,336 28,454 184,398 84,569 740,578 
Non-performing— — 37 226 — 2,692 — 2,955 
Total residential mortgage129,139 132,888 87,831 93,562 28,454 187,090 84,569 743,533 
Gross charge offs— — — — — (4)— (4)
Current period recoveries— — — — — 37 — 37 
Net recoveries— — — — — 33 — 33 
Consumer
Performing1,497 810 — — 98 380 289 3,074 
Non-performing— — — — — — — — 
Total consumer1,497 810 — — 98 380 289 3,074 
Gross charge offs(70)— (8)(9)— (30)— (117)
Current period recoveries26 — — — — — — 26 
Net charge offs(44)— (8)(9)— (30)— (91)
Total
Pass$445,735 $881,727 $551,908 $357,217 $251,202 $614,227 $243,318 $3,345,334 
Special mention200 714 996 1,700 — 19,477 5,245 28,332 
Substandard or lower— 5,391 — 3,176 230 14,052 2,535 25,384 
Performing130,636 133,698 87,794 93,336 28,552 184,778 84,858 743,652 
Nonperforming— — 37 226 — 2,692 — 2,955 
Total$576,571 $1,021,530 $640,735 $455,655 $279,984 $835,226 $335,956 $4,145,657 
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 September 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
September 30, 2023
Commercial real estate$8,355 $— $3,006 $11,361 $2,277,035 $2,288,396 $— 
Commercial and industrial232 — 1,533 1,765 646,674 648,439 — 
Construction472 — 2,256 2,728 459,487 462,215 — 
Residential mortgage4,068 233 1,675 5,976 737,557 743,533 9 
Consumer— — 3 3 3,071 3,074 3 
Total$13,127 $233 $8,473 $21,833 $4,123,824 $4,145,657 $12 
(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 September 30, 2023 and December 31, 2022 are summarized as follows:
September 30, 2023December 31, 2022
Non-accrual LoansTotal non-accrual Loans
(In thousands)With a Related AllowanceWithout a Related AllowanceTotal
Commercial real estate$461 $6,228 $6,689 $4,864 
Commercial and industrial1,375 181 1,556 1,222 
Construction— 2,256 2,256 — 
Residential mortgage95 2,862 2,957 1,698 
Consumer— — — 411 
$1,931 $11,527 $13,458 $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 nine months ended September 30, 2023:
(In thousands)Commercial real estateCommercial and industrialConstruction Residential mortgageConsumerTotal
Balance at June 30, 2023$14,197 $11,403 $3,667 $3,145 $176 $32,588 
Purchase credit deteriorated loans— — — — — — 
Loans charged off— — — — (33)(33)
Recoveries— — — 7 15 22 
Net loans (charged off) recovered — — — 7 (18)(11)
Provision for credit losses (1)
4,483 (4,072)2,211 (1,060)(135)1,427 
Balance at September 30, 2023$18,680 $7,331 $5,878 $2,092 $23 $34,004 
(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)(117)— (357)
Recoveries— — — 37 26 — 63 
Net loans (charged off) recovered(16)(220)— 33 (91)— (294)
Provision for credit losses (1)
4,952 (3,647)2,664 (826)(69)— 3,074 
Balance at September 30, 2023$18,680 $7,331 $5,878 $2,092 $23 $— $34,004 
(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 September 30, 2023:
(In thousands)ACL - LoansLoans
September 30, 2023Collectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal ACL - LoansCollectively Evaluated for Credit LossIndividually Evaluated for Credit LossTotal Loans
Commercial Real Estate$18,300 $380 $18,680 $2,281,707 $6,689 $2,288,396 
Commercial & Industrial 6,623 708 7,331 646,883 1,556 648,439 
Construction 5,878 — 5,878 459,959 2,256 462,215 
Residential Mortgage2,090 2 2,092 740,573 2,960 743,533 
Consumer23 — 23 3,074 — 3,074 
Total$32,914 $1,090 $34,004 $4,132,196 $13,461 $4,145,657 
The following table summarizes the allowance and recorded investments in loans receivable:
(In thousands)
As of, and for the
three months ended,
September 30, 2022		Commercial Real EstateCommercial and industrialConstructionResidential mortgageConsumer Unallocated Total
Allowance for loan and lease losses:
July 1, 2022$11,991 $3,671 $46 $1,143 $2 $23 $16,876 
Charge-offs— (1)— (3)(11)— (15)
Recoveries63 — — — 6 — 69 
Provisions 468 879 5 162 5 31 1,550 
September 30, 202212,522 4,549 51 1,302 2 54 18,480 
Individually evaluated for impairment28 831 — 51 — — 910 
Collectively evaluated for impairment$12,494 $3,718 $51 $1,251 $2 $54 $17,570 
(In thousands)
As of, and for the
nine months ended,
September 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— (1)— (3)(77)— (81)
Recoveries128 13 24 4 20 — 189 
Provisions2,979 1,098 (11)282 57 (630)3,775 
September 30, 202212,522 4,549 51 1,302 2 54 18,480 
Individually evaluated for impairment28 831 — 51 — — 910 
Collectively evaluated for impairment$12,494 $3,718 $51 $1,251 $2 $54 $17,570 
Loans Receivable
Ending Balance$1,944,802 $556,796 $400,188 $412,518 $8,153 $— $3,322,457 
Individually Evaluated for impairment713 1,309 — 1,675 — — 3,697 
Acquired with credit deterioration1,364 — 1,222 1,232 — — 3,818 
$1,942,725 $555,487 $398,966 $409,611 $8,153 $— $3,314,942 
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
Nine months ended September 30, 2023
Commercial real estate$51 $— $180 $231 0.01 %
Commercial and industrial
— 150 — 150 0.02 
Total$51 $150 $180 $381 0.01 %