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Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2021
Fair Value Disclosures [Abstract]  
Assets Measured at Fair Value on a Recurring Basis

 


 

The following tables illustrate the assets measured at fair value on a recurring basis segregated by hierarchy fair value levels.

 

 

 

 

 

 

 

Fair value measurements at June 30, 2021 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

June 30, 2021

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage-backed U.S. government agencies

 

$

2

 

 

$

—

 

 

$

2

 

 

$

—

 

Corporate debt securities

 

 

8,160

 

 

 

—

 

 

 

8,160

 

 

 

—

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

508

 

 

 

508

 

 

 

—

 

 

 

—

 

Total

 

$

8,670

 

 

$

508

 

 

$

8,162

 

 

$

—

 

 

 

 

 

 

 

 

 

Fair value measurements at December 31, 2020 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

December 31, 2020

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Available-for-sale securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies

 

$

2

 

 

$

—

 

 

$

2

 

 

$

—

 

Corporate debt securities

 

 

5,746

 

 

 

—

 

 

 

5,746

 

 

 

—

 

Other assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

515

 

 

 

515

 

 

 

—

 

 

 

—

 

Interest rate swap agreements

 

 

489

 

 

 

—

 

 

 

489

 

 

 

—

 

Total

 

$

6,752

 

 

$

515

 

 

$

6,237

 

 

$

—

 
Fair Value Measurements, Nonrecurring

The following tables illustrate the assets measured at fair value on a nonrecurring basis segregated by hierarchy fair value levels.

 

 

 

 

 

 

 

Fair value measurements at June 30, 2021 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

June 30, 2021

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Impaired Loans

 

$

1,649

 

 

$

—

 

 

$

—

 

 

$

1,649

 

 

 

 

 

 

 

 

Fair value measurements at December 31, 2020 using:

 

(Dollars in thousands)

 

Total carrying value at

 

 

Quoted prices in active markets

 

 

Significant other

observable inputs

 

 

Significant

unobservable

inputs

 

Assets:

 

December 31, 2020

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Impaired Loans

 

$

800

 

 

$

—

 

 

$

—

 

 

$

800

 

Foreclosed Assets Held for Sale

 

 

77

 

 

 

—

 

 

 

—

 

 

 

77

 
Fair Value Measurement Inputs and Valuation Techniques

 

The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Mid Penn has utilized Level 3 inputs to determine the fair value.

 

(Dollars in thousands)

 

Quantitative Information about Level 3 Fair Value Measurements

 

June 30, 2021

 

Fair Value Estimate

 

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average

 

Impaired Loans

 

$

1,649

 

 

Appraisal of collateral (a), (b)

 

Appraisal adjustments (b)

 

24% - 95%

 

52%

 

 

 

(Dollars in thousands)

 

Quantitative Information about Level 3 Fair Value Measurements

 

December 31, 2020

 

Fair Value Estimate

 

 

Valuation Technique

 

Unobservable Input

 

Range

 

Weighted Average

 

Impaired Loans

 

$

800

 

 

Appraisal of collateral (a), (b)

 

Appraisal adjustments (b)

 

25% - 100%

 

40%

 

Foreclosed Assets Held for Sale

 

 

77

 

 

Appraisal of collateral (a), (b)

 

Appraisal adjustments (b)

 

27% - 27%

 

27%

 

 

 

(a)

Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various Level 3 inputs which are not observable.

 

(b)

Appraisals may be adjusted downward by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The range of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.  Higher downward adjustments are caused by negative changes to the collateral or conditions in the real estate market, actual offers or sales contracts received, or age of the appraisal.

 
Fair Value, by Balance Sheet Grouping

The following table summarizes the carrying value and fair value of financial instruments at June 30, 2021 and December 31, 2020.

 

(Dollars in thousands)

June 30, 2021

 

 

December 31, 2020

 

 

Carrying

 

 

Fair

 

 

Carrying

 

 

Fair

 

 

Value

 

 

Value

 

 

Value

 

 

Value

 

Financial assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

636,347

 

 

$

636,347

 

 

$

303,724

 

 

$

303,724

 

Available-for-sale investment securities

 

8,162

 

 

 

8,162

 

 

 

5,748

 

 

 

5,748

 

Held-to-maturity investment securities

 

153,032

 

 

 

156,579

 

 

 

128,292

 

 

 

132,794

 

Equity securities

 

508

 

 

 

508

 

 

 

515

 

 

 

515

 

Loans held for sale

 

24,202

 

 

 

24,690

 

 

 

25,506

 

 

 

26,262

 

Net loans and leases

 

2,480,476

 

 

 

2,570,478

 

 

 

2,370,659

 

 

 

2,444,105

 

Restricted investment in bank stocks

 

6,816

 

 

 

6,816

 

 

 

7,594

 

 

 

7,594

 

Accrued interest receivable

 

10,638

 

 

 

10,638

 

 

 

3,619

 

 

 

3,619

 

Interest rate swap agreements

 

—

 

 

 

—

 

 

 

489

 

 

 

489

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

$

2,782,124

 

 

 

2,785,202

 

 

$

2,474,580

 

 

$

2,496,799

 

Short-term borrowings

 

196,889

 

 

 

196,889

 

 

 

125,617

 

 

 

125,617

 

Long-term debt (a)

 

71,520

 

 

 

71,496

 

 

 

71,648

 

 

 

70,498

 

Subordinated debt

 

44,593

 

 

 

46,291

 

 

 

44,580

 

 

 

43,098

 

Accrued interest payable

 

2,122

 

 

 

2,122

 

 

 

2,007

 

 

 

2,007

 

Interest rate swap agreements

 

560

 

 

 

560

 

 

 

—

 

 

 

—

 

 

(a)

Long-term debt excludes finance lease obligations.
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

 


 

The following tables present the carrying amount, fair value, and placement in the fair value hierarchy of Mid Penn’s financial instruments as of June 30, 2021 and December 31, 2020.  Carrying values approximate fair values for cash and cash equivalents, restricted investment in bank stocks, accrued interest receivable and payable, and short-term borrowings.  Other than cash and cash equivalents, which are considered Level 1 Inputs and mortgage servicing rights, which are Level 3 Inputs, these instruments are Level 2 Inputs. These tables exclude financial instruments for which the carrying amount approximates fair value, not previously disclosed.

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in Active Markets

 

 

 

 

 

Significant

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

for Identical Assets

 

 

Significant Other

 

 

Unobservable

 

 

 

Carrying

 

 

 

 

 

 

or Liabilities

 

 

Observable Inputs

 

 

Inputs

 

June 30, 2021

 

Amount

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Financial instruments - assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity investment

   securities

 

$

153,032

 

 

$

156,579

 

 

$

—

 

 

$

156,579

 

 

$

—

 

Loans held for sale

 

 

24,202

 

 

 

24,690

 

 

 

—

 

 

 

24,690

 

 

 

—

 

Net loans and leases

 

 

2,480,476

 

 

 

2,570,478

 

 

 

—

 

 

 

—

 

 

 

2,570,478

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments -

   liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

2,782,124

 

 

$

2,785,202

 

 

$

—

 

 

$

2,785,202

 

 

$

—

 

Long-term debt (a)

 

 

71,520

 

 

 

71,496

 

 

 

—

 

 

 

71,496

 

 

 

—

 

Subordinated debt

 

 

44,593

 

 

 

46,291

 

 

 

—

 

 

 

46,291

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

 

 

 

 

Quoted Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in Active Markets

 

 

 

 

 

Significant

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

for Identical Assets

 

 

Significant Other

 

 

Unobservable

 

 

 

Carrying

 

 

 

 

 

 

or Liabilities

 

 

Observable Inputs

 

 

Inputs

 

December 31, 2020

 

Amount

 

 

Fair Value

 

 

(Level 1)

 

 

(Level 2)

 

 

(Level 3)

 

Financial instruments - assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Held-to-maturity investment

   securities

 

$

128,292

 

 

$

132,794

 

 

$

—

 

 

$

132,794

 

 

$

—

 

Loans held for sale

 

 

25,506

 

 

 

26,262

 

 

 

—

 

 

 

26,262

 

 

 

—

 

Net loans and leases

 

 

2,370,659

 

 

 

2,444,105

 

 

 

—

 

 

 

—

 

 

 

2,444,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial instruments -

   liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

$

2,474,580

 

 

$

2,496,799

 

 

$

—

 

 

$

2,496,799

 

 

$

—

 

Long-term debt (a)

 

 

71,648

 

 

 

70,498

 

 

 

—

 

 

 

70,498

 

 

 

—

 

Subordinated debt

 

 

44,580

 

 

 

43,098

 

 

 

—

 

 

 

43,098

 

 

 

—

 

 

 

(a)

Long-term debt excludes finance lease obligations.