XML 14 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Loans and Allowance for Loan and Lease Losses
6 Months Ended
Jun. 30, 2020
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract]  
Loans and Allowance for Loan and Lease Losses

(4)

Loans and Allowance for Loan and Lease Losses

The types of loans in Mid Penn’s portfolio, summarized by those rated as “pass” (net of deferred fees and costs of $18,066,000 as of June 30, 2020 and $1,081,000 as of December 31, 2019), and the loans classified as “special mention” and “substandard” within Mid Penn’s internal risk rating system as of June 30, 2020 and December 31, 2019, are as follows:

 

(Dollars in thousands)

 

 

 

Special

 

 

 

 

 

 

June 30, 2020

 

Pass

 

 

Mention

 

 

Substandard

 

 

Total

 

Commercial and industrial

 

$

916,886

 

 

$

9,712

 

 

$

2,792

 

 

$

929,390

 

Commercial real estate

 

 

983,198

 

 

 

2,752

 

 

 

12,723

 

 

 

998,673

 

Commercial real estate - construction

 

 

224,325

 

 

 

 

 

 

32

 

 

 

224,357

 

Residential mortgage

 

 

216,948

 

 

 

54

 

 

 

1,350

 

 

 

218,352

 

Home equity

 

 

65,744

 

 

 

7

 

 

 

2,414

 

 

 

68,165

 

Consumer

 

 

6,828

 

 

 

 

 

 

 

 

 

6,828

 

 

 

$

2,413,929

 

 

$

12,525

 

 

$

19,311

 

 

$

2,445,765

 

 

(Dollars in thousands)

 

 

 

 

 

Special

 

 

 

 

 

 

 

 

 

December 31, 2019

 

Pass

 

 

Mention

 

 

Substandard

 

 

Total

 

Commercial and industrial

 

$

326,573

 

 

$

9,558

 

 

$

3,016

 

 

$

339,147

 

Commercial real estate

 

 

913,001

 

 

 

2,426

 

 

 

13,711

 

 

 

929,138

 

Commercial real estate - construction

 

 

181,650

 

 

 

 

 

 

40

 

 

 

181,690

 

Residential mortgage

 

 

235,252

 

 

 

55

 

 

 

1,417

 

 

 

236,724

 

Home equity

 

 

68,224

 

 

 

 

 

 

47

 

 

 

68,271

 

Consumer

 

 

7,786

 

 

 

 

 

 

 

 

 

7,786

 

 

 

$

1,732,486

 

 

$

12,039

 

 

$

18,231

 

 

$

1,762,756

 

 

The increase in deferred fees and costs from December 31, 2019 to June 30, 2020 was the result of collected but unearned PPP loan processing fees related to the PPP loans which Mid Penn processed and disbursed during the second quarter of 2020.  PPP loans are included in commercial and industrial loans and are fully guaranteed by the SBA, therefore all PPP loans outstanding are classified as “pass” within Mid Penn’s internal risk rating system as of June 30, 2020.  

 

Mid Penn had no loans classified as doubtful as of June 30, 2020 and December 31, 2019.

 

 


Impaired loans by loan portfolio class as of June 30, 2020 and December 31, 2019 are summarized as follows:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

(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

 

$

1,012

 

 

$

1,061

 

 

$

 

 

$

890

 

 

$

890

 

 

$

 

Commercial real estate

 

 

7,126

 

 

 

7,465

 

 

 

 

 

 

7,973

 

 

 

8,366

 

 

 

 

Commercial real estate - construction

 

 

32

 

 

 

34

 

 

 

 

 

 

40

 

 

 

61

 

 

 

 

Residential mortgage

 

 

776

 

 

 

798

 

 

 

 

 

 

817

 

 

 

838

 

 

 

 

Home equity

 

 

2,406

 

 

 

2,436

 

 

 

 

 

 

25

 

 

 

27

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded and acquired with credit deterioration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

 

 

$

 

 

$

 

 

$

3

 

 

$

68

 

 

$

 

Commercial real estate

 

 

1,430

 

 

 

1,700

 

 

 

 

 

 

1,423

 

 

 

1,708

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

354

 

 

 

494

 

 

 

 

 

 

381

 

 

 

578

 

 

 

 

Home equity

 

 

1

 

 

 

4

 

 

 

 

 

 

1

 

 

 

5

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

198

 

 

$

198

 

 

$

53

 

 

$

 

 

$

 

 

$

 

Commercial real estate

 

 

902

 

 

 

944

 

 

 

190

 

 

 

338

 

 

 

380

 

 

 

166

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Impaired Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,210

 

 

$

1,259

 

 

$

53

 

 

$

893

 

 

$

958

 

 

$

 

Commercial real estate

 

 

9,458

 

 

 

10,109

 

 

 

190

 

 

 

9,734

 

 

 

10,454

 

 

 

166

 

Commercial real estate - construction

 

 

32

 

 

 

34

 

 

 

 

 

 

40

 

 

 

61

 

 

 

 

Residential mortgage

 

 

1,130

 

 

 

1,292

 

 

 

 

 

 

1,198

 

 

 

1,416

 

 

 

 

Home equity

 

 

2,407

 

 

 

2,440

 

 

 

 

 

 

26

 

 

 

32

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The average recorded investment of impaired loans and related interest income recognized for the three and six months ended June 30, 2020 and 2019 are summarized as follows:

 

 

 

Three Months Ended

 

 

 

June 30, 2020

 

 

June 30, 2019

 

(Dollars in thousands)

 

Average Recorded Investment

 

 

Interest Income Recognized

 

 

Average Recorded Investment

 

 

Interest Income Recognized

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

955

 

 

$

 

 

$

 

 

$

 

Commercial real estate

 

 

7,004

 

 

 

 

 

 

2,273

 

 

 

 

Commercial real estate - construction

 

 

36

 

 

 

 

 

 

40

 

 

 

 

Residential mortgage

 

 

762

 

 

 

6

 

 

 

880

 

 

 

7

 

Home equity

 

 

1,215

 

 

 

 

 

 

29

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded and acquired with credit deterioration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

 

 

$

 

 

$

29

 

 

$

 

Commercial real estate

 

 

1,423

 

 

 

 

 

 

1,602

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

360

 

 

 

 

 

 

1,222

 

 

 

 

Home equity

 

 

1

 

 

 

 

 

 

4

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

99

 

 

$

 

 

$

140

 

 

$

 

Commercial real estate

 

 

835

 

 

 

 

 

 

513

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

183

 

 

 

 

Residential mortgage

 

 

 

 

 

 

 

 

 

 

 

 

Home equity

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Impaired Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,054

 

 

$

 

 

$

169

 

 

$

 

Commercial real estate

 

 

9,262

 

 

 

 

 

 

4,388

 

 

 

 

Commercial real estate - construction

 

 

36

 

 

 

 

 

 

223

 

 

 

 

Residential mortgage

 

 

1,122

 

 

 

6

 

 

 

2,102

 

 

 

7

 

Home equity

 

 

1,216

 

 

 

 

 

 

33

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

June 30, 2020

 

 

June 30, 2019

 

(Dollars in thousands)

 

Average Recorded Investment

 

 

Interest Income Recognized

 

 

Average Recorded Investment

 

 

Interest Income Recognized

 

With no related allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

933

 

 

$

 

 

$

 

 

$

 

Commercial real estate

 

 

7,362

 

 

 

 

 

 

2,289

 

 

 

 

Commercial real estate - construction

 

 

37

 

 

 

 

 

 

27

 

 

 

 

Residential mortgage

 

 

780

 

 

 

13

 

 

 

857

 

 

 

14

 

Home equity

 

 

818

 

 

 

 

 

 

29

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded and acquired with credit deterioration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1

 

 

$

 

 

$

29

 

 

$

 

Commercial real estate

 

 

1,421

 

 

 

 

 

 

1,589

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

367

 

 

 

 

 

 

1,219

 

 

 

 

Home equity

 

 

1

 

 

 

 

 

 

4

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With an allowance recorded:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

66

 

 

$

 

 

$

1,603

 

 

$

3

 

Commercial real estate

 

 

634

 

 

 

 

 

 

477

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

245

 

 

 

 

Residential mortgage

 

 

 

 

 

 

 

 

 

 

 

 

Home equity

 

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Impaired Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

$

1,000

 

 

$

 

 

$

1,632

 

 

$

3

 

Commercial real estate

 

 

9,417

 

 

 

 

 

 

4,355

 

 

 

 

Commercial real estate - construction

 

 

37

 

 

 

 

 

 

272

 

 

 

 

Residential mortgage

 

 

1,147

 

 

 

13

 

 

 

2,076

 

 

 

14

 

Home equity

 

 

819

 

 

 

 

 

 

33

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 


Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of June 30, 2020 and December 31, 2019 are summarized as follows:

 

(Dollars in thousands)

 

June 30, 2020

 

 

December 31, 2019

 

Commercial and industrial

 

$

1,210

 

 

$

894

 

Commercial real estate

 

 

9,458

 

 

 

9,800

 

Commercial real estate - construction

 

 

32

 

 

 

40

 

Residential mortgage

 

 

697

 

 

 

711

 

Home equity

 

 

2,407

 

 

 

26

 

Consumer

 

 

 

 

 

 

 

 

$

13,804

 

 

$

11,471

 

 

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, 2020 and December 31, 2019 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, 2020

 

Due

 

 

Due

 

 

Days

 

 

Due

 

 

Current

 

 

Total Loans

 

 

Accruing

 

Commercial and industrial

 

$

859

 

 

$

233

 

 

$

953

 

 

$

2,045

 

 

$

927,345

 

 

$

929,390

 

 

$

800

 

Commercial real estate

 

 

325

 

 

 

146

 

 

 

7,519

 

 

 

7,990

 

 

 

989,253

 

 

 

997,243

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

224,357

 

 

 

224,357

 

 

 

 

Residential mortgage

 

 

99

 

 

 

49

 

 

 

250

 

 

 

398

 

 

 

217,600

 

 

 

217,998

 

 

 

 

Home equity

 

 

254

 

 

 

7

 

 

 

2,406

 

 

 

2,667

 

 

 

65,497

 

 

 

68,164

 

 

 

 

Consumer

 

 

4

 

 

 

 

 

 

 

 

 

4

 

 

 

6,824

 

 

 

6,828

 

 

 

 

Loans acquired with credit deterioration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

 

 

 

 

 

 

 

1,419

 

 

 

1,419

 

 

 

11

 

 

 

1,430

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

 

 

 

 

 

 

189

 

 

 

189

 

 

 

165

 

 

 

354

 

 

 

 

Home equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,541

 

 

$

435

 

 

$

12,736

 

 

$

14,712

 

 

$

2,431,053

 

 

$

2,445,765

 

 

$

800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans

 

(Dollars in thousands)

 

30-59

 

 

60-89

 

 

Greater

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivable >

 

 

 

Days Past

 

 

Days Past

 

 

than 90

 

 

Total Past

 

 

 

 

 

 

 

 

 

 

90 Days and

 

December 31, 2019

 

Due

 

 

Due

 

 

Days

 

 

Due

 

 

Current

 

 

Total Loans

 

 

Accruing

 

Commercial and industrial

 

$

 

 

$

1,059

 

 

$

890

 

 

$

1,949

 

 

$

337,195

 

 

$

339,144

 

 

$

 

Commercial real estate

 

 

1,298

 

 

 

11

 

 

 

7,819

 

 

 

9,128

 

 

 

918,587

 

 

 

927,715

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

181,690

 

 

 

181,690

 

 

 

 

Residential mortgage

 

 

145

 

 

 

 

 

 

326

 

 

 

471

 

 

 

235,872

 

 

 

236,343

 

 

 

 

Home equity

 

 

34

 

 

 

 

 

 

 

 

 

34

 

 

 

68,236

 

 

 

68,270

 

 

 

 

Consumer

 

 

5

 

 

 

3

 

 

 

 

 

 

8

 

 

 

7,778

 

 

 

7,786

 

 

 

 

Loans acquired with credit deterioration:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

 

 

 

 

 

 

3

 

 

 

3

 

 

 

 

 

 

3

 

 

 

 

Commercial real estate

 

 

16

 

 

 

473

 

 

 

934

 

 

 

1,423

 

 

 

 

 

 

1,423

 

 

 

 

Commercial real estate - construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage

 

 

5

 

 

 

 

 

 

203

 

 

 

208

 

 

 

173

 

 

 

381

 

 

 

 

Home equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

 

 

 

Consumer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

1,503

 

 

$

1,546

 

 

$

10,175

 

 

$

13,224

 

 

$

1,749,532

 

 

$

1,762,756

 

 

$

 

The allowance for loan losses and the related loan loss provision for the periods presented reflect Mid Penn’s continued application of the incurred loss method for estimating credit losses, as Mid Penn is not required to adopt the current expected credit loss (“CECL”) accounting standard until January 1, 2023.  PPP loans are included in the commercial and industrial classification and, as the PPP loans are fully guaranteed by the Small Business Administration, no allowance for loan losses was recorded against the $588,667,000 balance of PPP loans outstanding as of June 30, 2020.

.  

The following tables summarize the allowance and recorded investments in loans receivable.

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of, and for the

three months ended,

June 30, 2020

 

Commercial and industrial

 

 

Commercial real estate

 

 

Commercial real estate - construction

 

 

Residential mortgage

 

 

Home equity

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 1, 2020

 

$

2,427

 

 

$

6,630

 

 

$

57

 

 

$

436

 

 

$

448

 

 

$

2

 

 

$

14

 

 

$

10,014

 

Charge-offs

 

 

(1

)

 

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

(12

)

Recoveries

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

1

 

 

 

10

 

 

 

 

 

 

15

 

Provisions

 

 

358

 

 

 

611

 

 

 

13

 

 

 

(9

)

 

 

68

 

 

 

(6

)

 

 

15

 

 

 

1,050

 

Ending balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

$

2,786

 

 

$

7,241

 

 

$

65

 

 

$

427

 

 

$

517

 

 

$

2

 

 

$

29

 

 

$

11,067

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of, and for the

six months ended,

June 30, 2020

 

Commercial

and

industrial

 

 

Commercial real estate

 

 

Commercial real estate - construction

 

 

Residential mortgage

 

 

Home equity

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2020

 

$

2,341

 

 

$

6,259

 

 

$

51

 

 

$

417

 

 

$

442

 

 

$

2

 

 

$

3

 

 

$

9,515

 

Charge-offs

 

 

(45

)

 

 

 

 

 

(7

)

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

(70

)

Recoveries

 

 

2

 

 

 

1

 

 

 

2

 

 

 

3

 

 

 

1

 

 

 

13

 

 

 

 

 

 

22

 

Provisions

 

 

488

 

 

 

981

 

 

 

19

 

 

 

7

 

 

 

74

 

 

 

5

 

 

 

26

 

 

 

1,600

 

Ending balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

 

2,786

 

 

 

7,241

 

 

 

65

 

 

 

427

 

 

 

517

 

 

 

2

 

 

 

29

 

 

 

11,067

 

Individually evaluated for impairment

 

 

53

 

 

 

190

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

243

 

Ending balance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

collectively evaluated for impairment

 

$

2,733

 

 

$

7,051

 

 

$

65

 

 

$

427

 

 

$

517

 

 

$

2

 

 

$

29

 

 

$

10,824

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

929,390

 

 

$

998,673

 

 

$

224,357

 

 

$

218,352

 

 

$

68,165

 

 

$

6,828

 

 

$

 

 

$

2,445,765

 

Ending balance: individually evaluated for impairment

 

 

1,210

 

 

 

8,028

 

 

 

32

 

 

 

776

 

 

 

2,406

 

 

 

 

 

 

 

 

 

12,452

 

Ending balance: acquired with credit deterioration

 

 

 

 

 

1,430

 

 

 

 

 

 

354

 

 

 

1

 

 

 

 

 

 

 

 

 

1,785

 

Ending balance: collectively evaluated for impairment

 

$

928,180

 

 

$

989,215

 

 

$

224,325

 

 

$

217,222

 

 

$

65,758

 

 

$

6,828

 

 

$

 

 

$

2,431,528

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

Commercial

and

industrial

 

 

Commercial real estate

 

 

Commercial real estate - construction

 

 

Residential mortgage

 

 

Home equity

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

2,341

 

 

$

6,259

 

 

$

51

 

 

$

417

 

 

$

442

 

 

$

2

 

 

$

3

 

 

$

9,515

 

Ending balance: individually evaluated for impairment

 

 

 

 

 

166

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

166

 

Ending balance: collectively evaluated for impairment

 

$

2,341

 

 

$

6,093

 

 

$

51

 

 

$

417

 

 

$

442

 

 

$

2

 

 

$

3

 

 

$

9,349

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

339,147

 

 

$

929,138

 

 

$

181,690

 

 

$

236,724

 

 

$

68,271

 

 

$

7,786

 

 

$

 

 

$

1,762,756

 

Ending balance: individually evaluated for impairment

 

 

890

 

 

 

8,311

 

 

 

40

 

 

 

817

 

 

 

25

 

 

 

 

 

 

 

 

 

10,083

 

Ending balance: acquired with credit deterioration

 

 

3

 

 

 

1,423

 

 

 

 

 

 

381

 

 

 

1

 

 

 

 

 

 

 

 

 

1,808

 

Ending balance: collectively evaluated for impairment

 

$

338,254

 

 

$

919,404

 

 

$

181,650

 

 

$

235,526

 

 

$

68,245

 

 

$

7,786

 

 

$

 

 

$

1,750,865

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of, and for the

three months ended,

June 30, 2019

 

Commercial and industrial

 

 

Commercial real estate

 

 

Commercial real estate - construction

 

 

Residential mortgage

 

 

Home equity

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

April 1, 2019

 

$

2,443

 

 

$

5,031

 

 

$

81

 

 

$

477

 

 

$

450

 

 

$

6

 

 

$

14

 

 

$

8,502

 

Charge-offs

 

 

(205

)

 

 

 

 

 

(20

)

 

 

 

 

 

 

 

 

(38

)

 

 

 

 

 

(263

)

Recoveries

 

 

42

 

 

 

15

 

 

 

 

 

 

 

 

 

1

 

 

 

9

 

 

 

 

 

 

67

 

Provisions

 

 

168

 

 

 

266

 

 

 

(16

)

 

 

(1

)

 

 

31

 

 

 

30

 

 

 

(13

)

 

 

465

 

Ending balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

$

2,448

 

 

$

5,312

 

 

$

45

 

 

$

476

 

 

$

482

 

 

$

7

 

 

$

1

 

 

$

8,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of, and for the

six months ended,

June 30, 2019

 

Commercial and industrial

 

 

Commercial real estate

 

 

Commercial real estate - construction

 

 

Residential mortgage

 

 

Home equity

 

 

Consumer

 

 

Unallocated

 

 

Total

 

Allowance for loan and lease losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

January 1, 2019

 

 

2,391

 

 

 

4,703

 

 

 

75

 

 

 

453

 

 

 

528

 

 

 

7

 

 

 

240

 

 

$

8,397

 

Charge-offs

 

 

(205

)

 

 

(12

)

 

 

(40

)

 

 

 

 

 

 

 

 

(47

)

 

 

 

 

 

(304

)

Recoveries

 

 

43

 

 

 

33

 

 

 

 

 

 

 

 

 

1

 

 

 

11

 

 

 

 

 

 

88

 

Provisions

 

 

219

 

 

 

588

 

 

 

10

 

 

 

23

 

 

 

(47

)

 

 

36

 

 

 

(239

)

 

 

590

 

Ending balance,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

2,448

 

 

 

5,312

 

 

 

45

 

 

 

476

 

 

 

482

 

 

 

7

 

 

 

1

 

 

 

8,771

 

Individually evaluated for impairment

 

 

13

 

 

 

243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

256

 

Ending balance:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

collectively evaluated for impairment

 

$

2,435

 

 

$

5,069

 

 

$

45

 

 

$

476

 

 

$

482

 

 

$

7

 

 

$

1

 

 

$

8,515

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivables:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

301,271

 

 

$

883,317

 

 

$

173,900

 

 

$

249,114

 

 

$

70,442

 

 

$

10,129

 

 

$

 

 

$

1,688,173

 

Ending balance: individually evaluated for impairment

 

 

76

 

 

 

2,745

 

 

 

40

 

 

 

897

 

 

 

28

 

 

 

 

 

 

 

 

 

3,786

 

Ending balance: acquired with credit deterioration

 

 

29

 

 

 

1,616

 

 

 

 

 

 

1,234

 

 

 

4

 

 

 

 

 

 

 

 

 

2,883

 

Ending balance: collectively evaluated for impairment

 

$

301,166

 

 

$

878,956

 

 

$

173,860

 

 

$

246,983

 

 

$

70,410

 

 

$

10,129

 

 

$

 

 

$

1,681,504

 

 


Mid Penn entered into forbearance or modification agreements on all loans currently classified as troubled debt restructures and all of these agreements have resulted in additional principal repayment.  The terms of these forbearance agreements vary and generally involve modifications from the original loan agreements, including either a reduction in the amount of principal payments for certain or extended periods, interest rate reductions, and/or the intent for the loan to be repaid as collateral is sold.

Mid Penn’s troubled debt restructured loans at June 30, 2020 totaled $948,000 and included three accruing impaired residential mortgage loans to unrelated borrowers in compliance with the terms of the modifications totaling $477,000. The remaining $471,000 of troubled debt restructurings was attributable to seven loans among five relationships which were classified as nonaccrual impaired based upon a collateral evaluation in accordance with the guidance on impaired loans.  The balance of nonaccrual impaired troubled debt restructured loans as of June 30, 2020 was comprised of $420,000 in commercial real estate loans amongst two borrowers, one commercial real estate construction loan for $32,000, one residential mortgage loan for $11,000, and one commercial and industrial loan for $7,000.  As of June 30, 2020, there were no defaulted troubled debt restructured loans, as all troubled debt restructured loans were current with respect to their associated forbearance agreements.  There were also no defaults on troubled debt restructured loans within twelve months of restructure during 2020.  

Mid Penn’s troubled debt restructured loans at December 31, 2019 totaled $2,238,000, and included three accruing impaired residential mortgage loans to unrelated borrowers in compliance with the terms of the modifications totaling $490,000.  The remaining $1,748,000 of troubled debt restructurings was attributable to eight loans among five relationships which were classified as nonaccrual impaired based upon a collateral evaluation in accordance with the guidance on impaired loans.  One large relationship accounted for $1,252,000 of the total $1,748,000 in nonaccrual impaired troubled debt restructured loans.  As of December 31, 2019, there were no defaulted troubled debt restructured loans, as all troubled debt restructured loans were current with respect to their associated forbearance agreements.  There were also no defaults on troubled debt restructured loans within twelve months of restructure during 2019.

The recorded investments in troubled debt restructured loans at June 30, 2020 and December 31, 2019 are as follows:

(Dollars in thousands)

Pre-Modification

 

 

Post-Modification

 

 

 

 

June 30, 2020

Outstanding Recorded Investment

 

 

Outstanding Recorded Investment

 

 

Recorded Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

$

8

 

 

$

8

 

 

$

7

 

Commercial real estate

 

1,214

 

 

 

1,115

 

 

 

420

 

Commercial real estate - construction

 

40

 

 

 

40

 

 

 

32

 

Residential mortgage

 

689

 

 

 

687

 

 

 

489

 

 

$

1,951

 

 

$

1,850

 

 

$

948

 

 

(Dollars in thousands)

Pre-Modification

 

 

Post-Modification

 

 

 

 

December 31, 2019

Outstanding Recorded Investment

 

 

Outstanding Recorded Investment

 

 

Recorded Investment

 

Commercial and industrial

$

3

 

 

$

3

 

 

$

3

 

Commercial real estate

 

2,562

 

 

 

2,463

 

 

 

1,705

 

Commercial real estate - construction

 

40

 

 

 

40

 

 

 

40

 

Residential mortgage

 

677

 

 

 

675

 

 

 

490

 

 

$

3,282

 

 

$

3,181

 

 

$

2,238

 

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act provided that qualifying short-term modifications made in response to COVID-19 do not need to be accounted for as troubled debt restructurings. The federal financial institution regulatory agencies, in consultation with state financial regulators, affirmed the CARES Act provisions in a revised interagency statement issued on April 7, 2020. As of June 30, 2020, Mid Penn had provided loan modifications meeting the CARES Act qualifications to 1,019 borrowers with aggregate loans outstanding of $444,886,000.  Depending upon the specific needs and circumstances affecting each borrower, the majority of these modifications range from deferrals of both principal and interest payments for three to six months, or borrowers reverting to interest-only payments for a period of three to six months.  Interest will continue to accrue on loans modified under the CARES Act during the deferral period.  Mid Penn remains in communication with each of these borrowers to assess the ongoing credit status of the borrowers, and may make further adjustments to a borrower’s modification at some future time if warranted for the specific situation.

The following tables provide activity for the accretable yield of acquired impaired loans from the Phoenix Bancorp, Inc. (March 2015), Scottdale (January 2018), and First Priority (July 2018) acquisitions for the three and six months ended June 30, 2020.

 

(Dollars in thousands)

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

2020

 

 

2019

 

Accretable yield, beginning of period

 

$

72

 

 

$

254

 

Accretable yield amortized to interest income

 

 

(16

)

 

 

(57

)

Accretable yield, end of period

 

$

56

 

 

$

197

 

 

(Dollars in thousands)

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

Accretable yield, beginning of period

 

$

89

 

 

$

309

 

Accretable yield amortized to interest income

 

 

(33

)

 

 

(112

)

Accretable yield, end of period

 

$

56

 

 

$

197