The types of loans in Mid Penn’s portfolio, summarized by those rated as “pass” (net of deferred fees and costs of $6,264,000 as of December 31, 2021 and $9,084,000 as of December 31, 2020), and the loans classified as “special mention” and “substandard” within Mid Penn’s internal risk rating system as of December 31, 2021 and December 31, 2020, are as follows:

(Dollars in thousands)

December 31, 2021	Pass		Special Mention		Substandard		Total
Commercial and industrial	$	606,484	$	10,321	$	2,757	$	619,562
Commercial real estate		1,601,196		35,508		31,438		1,668,142
Commercial real estate - construction		371,337		—		1,397		372,734
Residential mortgage		319,862		294		3,067		323,223
Home equity		106,853		534		2,919		110,306
Consumer		10,429		—		—		10,429
	$	3,016,161	$	46,657	$	41,578	$	3,104,396

(Dollars in thousands)

December 31, 2020	Pass		Special Mention		Substandard		Total
Commercial and industrial	$	739,306	$	9,928	$	3,120	$	752,354
Commercial real estate		1,084,123		1,708		13,825		1,099,656
Commercial real estate - construction		248,882		—		31		248,913
Residential mortgage		200,544		53		1,244		201,841
Home equity		71,856		3		2,365		74,224
Consumer		7,053		—		—		7,053
	$	2,351,764	$	11,692	$	20,585	$	2,384,041

All PPP loans, whether disbursed in 2020 or 2021, are included in commercial and industrial loans and are fully guaranteed by the SBA; therefore, all PPP loans outstanding (net of the related deferred PPP fees) are classified as “pass” within Mid Penn’s internal risk rating system as of December 31, 2021.

Mid Penn had no loans classified as “Doubtful” as of December 31, 2021 and December 31, 2020.

Impaired loans by loan portfolio class as of December 31, 2021 and 2020 are summarized as follows:

	December 31, 2021						December 31, 2020
(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	$	—	$	31	$	—	$	899	$	931	$	—
Commercial real estate		854		1,243		—		8,215		8,574		—
Commercial real estate - construction		22		27		—		31		34		—
Residential mortgage		1,259		1,295		—		818		842		—
Home equity		2,377		2,377		—		2,365		2,395		—
Consumer		—		—		—		—		—		—

With no related allowance recorded and acquired with credit deterioration: *
Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate		2,231		2,909		—		1,419		1,693		—
Commercial real estate - construction		1,196		1,469		—		—		—		—
Residential mortgage		1,362		1,847		—		323		568		—
Home equity		86		111		—		—		13		—
Consumer		—		—		—		—		—		—

With an allowance recorded:
Commercial and industrial	$	308	$	339	$	67	$	553	$	574	$	533
Commercial real estate		287		359		121		887		994		274
Commercial real estate - construction		—		—		—		—		—		—
Residential mortgage		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—


Total:
Commercial and industrial	$	308	$	370	$	67	$	1,452	$	1,505	$	533
Commercial real estate		3,372		4,511		121		10,521		11,261		274
Commercial real estate - construction		1,218		1,496		—		31		34		—
Residential mortgage		2,621		3,142		—		1,141		1,410		—
Home equity		2,463		2,488		—		2,365		2,408		—
Consumer		—		—		—		—		—		—

The average recorded investment of impaired loans and related interest income recognized for the years ended December 31, 2021, 2020, and 2019 are summarized as follows:

	December 31, 2021				December 31, 2020				December 31, 2019
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	303	$	2	$	1,136	$	—	$	178	$	3
Commercial real estate		2,308		2		9,379		5		3,363		20
Commercial real estate - construction		26		—		44		—		32		—
Residential mortgage		974		26		998		26		854		30
Home equity		2,367		2		1,801		—		27		—
Consumer		—		—		—		—		—		—

With no related allowance recorded and acquired with credit deterioration:
Commercial and industrial	$	—	$	—	$	1	$	—	$	18	$	—
Commercial real estate		1,485		—		1,423		—		1,597		—
Commercial real estate - construction		122		—		—		—		—		—
Residential mortgage		401		—		361		—		991		—
Home equity		8		—		1		—		4		—
Consumer		—		—		—		—		—		—

With an allowance recorded:
Commercial and industrial	$	211	$	—	$	205	$	—	$	962	$	—
Commercial real estate		1,011		—		752		—		424		—
Commercial real estate - construction		—		—		—		—		147		—
Residential mortgage		—		—		—		—		—		—
Home equity		—		—		—		—		—		—
Consumer		—		—		—		—		—		—

Total:
Commercial and industrial	$	514	$	2	$	1,342	$	—	$	1,158	$	3
Commercial real estate		4,804		2		11,554		5		5,384		20
Commercial real estate - construction		148		—		44		—		179		—
Residential mortgage		1,375		26		1,359		26		1,845		30
Home equity		2,375		2		1,802		—		31		—

Nonaccrual loans by loan portfolio class, including loans acquired with credit deterioration, as of December 31, 2021 and 2020 are summarized as follows:

If nonaccrual loans and leases had been current in accordance with their original terms and had been outstanding throughout the period or since origination, if held for part of the period, Mid Penn would have recorded interest income on these loans of $177,000, $638,000, and $333,000, in the years ended December 31, 2021, 2020, and 2019, respectively. Mid Penn has no commitments to lend additional funds to borrowers with impaired or nonaccrual loans.

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 December 31, 2021 and 2020 are summarized as follows:

(Dollars in thousands)
December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Receivable > 90 Days and Accruing

Commercial and industrial	$	1,378	$	62	$	404	$	1,844	$	617,718	$	619,562	$	96
Commercial real estate		32		55		769		856		1,665,055		1,665,911		—
Commercial real estate - construction		—		—		205		205		371,333		371,538		205
Residential mortgage		1,246		205		1,002		2,453		319,408		321,861		212
Home equity		403		—		2,377		2,780		107,440		110,220		—
Consumer		6		2		2		10		10,419		10,429		2
Loans acquired with credit deterioration:
Commercial and industrial		—		—		—		—		—		—		—
Commercial real estate		—		3		1,628		1,631		600		2,231		—
Commercial real estate - construction		—		—		—		—		1,196		1,196		—
Residential mortgage		54		—		818		872		490		1,362		—
Home equity		—		—		—		—		86		86		—
Consumer		—		—		—		—		—		—		—
Total	$	3,119	$	327	$	7,205	$	10,651	$	3,093,745	$	3,104,396	$	515

(Dollars in thousands)
December 31, 2020	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days		Total Past Due		Current		Total Loans		Loans Receivable > 90 Days and Accruing

Commercial and industrial	$	365	$	1,017	$	1,377	$	2,759	$	749,595	$	752,354	$	—
Commercial real estate		1,096		—		7,668		8,764		1,089,473		1,098,237		—
Commercial real estate - construction		—		—		—		—		248,913		248,913		—
Residential mortgage		126		—		282		408		201,110		201,518		—
Home equity		71		22		2,343		2,436		71,788		74,224		—
Consumer		—		6		—		6		7,047		7,053		—
Loans acquired with credit deterioration:
Commercial and industrial		—		—		—		—		—		—		—
Commercial real estate		9		—		1,402		1,411		8		1,419		—
Commercial real estate - construction		—		—		—		—		—		—		—
Residential mortgage		—		—		168		168		155		323		—
Home equity		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		—		—
Total	$	1,667	$	1,045	$	13,240	$	15,952	$	2,368,089	$	2,384,041	$	—

Activity in the allowance for loan and lease losses for the years ended December 31, 2021, 2020, and 2019, and the recorded investment in loans receivable as of December 31, 2021, 2020, and 2019 are as follows:

(Dollars in thousands)
Dec. 31, 2021	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	$	3,066		$	8,655		$	134		$	429		$	507	$	1		$	590	$	13,382
Charge-offs		(866	)		(1,044	)		(23	)		(13	)		—		(42	)		—		(1,988	)
Recoveries		13			207			8			11			—		19			—		258
Provisions (credits)		1,226			1,597			(81	)		32			53		24			94		2,945
Ending balance		3,439			9,415			38			459			560		2			684		14,597
Ending balance: individually evaluated for impairment		67			121			—			—			—		—			—		188
Ending balance: collectively evaluated for impairment	$	3,372		$	9,294		$	38		$	459		$	560	$	2		$	684	$	14,409

Loans receivable:
Ending balance	$	619,562		$	1,668,142		$	372,734		$	323,223		$	110,306	$	10,429		$	—	$	3,104,396
Ending balance: individually evaluated for impairment		308			1,141			22			1,259			2,377		—			—		5,107
Ending balance: acquired with credit deterioration		—			2,231			1,196			1,362			86		—			—		4,875
Ending balance: collectively evaluated for impairment	$	619,254		$	1,664,770		$	371,516		$	320,602		$	107,843	$	10,429		$	—	$	3,094,414

(Dollars in thousands)
Dec. 31, 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	$	2,341		$	6,259		$	51		$	417		$	442	$	2		$	3	$	9,515
Charge-offs		(45	)		(258	)		(7	)		(4	)		-		(58	)		—		(372	)
Recoveries		3			1			2			3			3		27			—		39
Provisions (credits)		767			2,653			88			13			62		30			587		4,200
Ending balance		3,066			8,655			134			429			507		1			590		13,382
Ending balance: individually evaluated for impairment		533			274			—			—			—		—			—		807
Ending balance: collectively evaluated for impairment	$	2,533		$	8,381		$	134		$	429		$	507	$	1		$	590	$	12,575

Loans receivable:
Ending balance	$	752,354		$	1,099,656		$	248,913		$	201,841		$	74,224	$	7,053		$	—	$	2,384,041
Ending balance: individually evaluated for impairment		1,452			9,102			31			818			2,365		—			—		13,768
Ending balance: acquired with credit deterioration		—			1,419			—			323			—		—			—		1,742
Ending balance: collectively evaluated for impairment	$	750,902		$	1,089,135		$	248,882		$	200,700		$	71,859	$	7,053		$	—	$	2,368,531

(Dollars in thousands)
Dec. 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:
Beginning Balance	$	2,391		$	4,703		$	75		$	453		$	528		$	7		$	240		$	8,397
Charge-offs		(217	)		(60	)		(40	)		(29	)		(18	)		(64	)		—			(428	)
Recoveries		45			82			—			9			5			15			—			156
Provisions (credits)		122			1,534			16			(16	)		(73	)		44			(237	)		1,390
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

The recorded investments in troubled debt restructured loans at December 31, 2021 and 2020 are as follows:

Mid Penn’s troubled debt restructured loans at December 31, 2021 totaled $819,000, and included (i) two accruing impaired residential mortgage loans to unrelated borrowers in compliance with the terms of the modifications totaling $435,000, and (ii) $384,000 of troubled debt restructurings attributable to eight loans among six relationships which were classified as nonaccrual impaired based upon a collateral evaluation in accordance with the guidance on impaired loans. The balance of these nonaccrual impaired troubled debt restructured loans as of December 31, 2021 was comprised of $320,000 in commercial real estate loans amongst two borrowers; one commercial real estate construction loan for $22,000, two residential mortgage loans for $37,000, and one commercial and industrial loan for $5,000. As of December 31, 2021, 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 2021.

Mid Penn’s troubled debt restructured loans at December 31, 2020 totaled $1,480,000, and included three accruing impaired residential mortgage loans to unrelated borrowers in compliance with the terms of the modifications totaling $463,000. The remaining $1,017,000 of troubled debt restructurings were attributable to nine loans among seven 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 $535,000 of the total $1,017,000 in nonaccrual impaired troubled debt restructured loans. As of December 31, 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 entered into forbearance agreements on all loans currently classified as troubled debt restructurings and all of these agreements have resulted in additional principal repayment. The terms of these forbearance agreements vary whereby principal payments have been decreased, interest rates have been reduced and/or the loan will be repaid as collateral is sold.

There were no loans modified in 2021, three loans modified in 2020, and two loans modified in 2019 that resulted in troubled debt restructurings. The following table summarizes the loans whose terms have been modified resulting in troubled debt restructurings during the years ended December 31, 2020, and 2019.

The CARES Act, signed into law in March 2020, along with a joint agency statement issued by banking agencies, provided that short-term modifications made in response to COVID-19 to current and performing borrowers did not need to be accounted for as troubled debt restructurings. Depending upon the specific needs and circumstances affecting each borrower, the majority of these modifications ranged from deferrals of both principal and interest payments, with some borrowers reverting to interest-only payments. The majority of the deferrals were granted for a period of three months, but some as long as six months, depending upon management’s specific evaluation of each borrower’s circumstances. Interest continued to accrue on loans modified under the CARES Act during the deferral period. During 2020, Mid Penn had provided loan modifications meeting the CARES Act qualifications to over 1,000 borrowers. 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 relationship at some future time if warranted for the specific situation. As of December 31, 2021, the principal balance of loans remaining in this CARES Act qualifying deferment status totaled $3,571,000, or less than 1 percent of the total loan portfolio. As of December 31, 2020, the principal balance of loans remaining in this CARES Act qualifying deferment status totaled $11,681,000, or less than 1 percent of the total loan portfolio. Most borrowers granted a CARES Act deferral have returned to regular payment status.

The following table provides activity for the accretable yield of purchased impaired loans for the years ended December 31, 2021 and 2020.

The Bank has granted loans to certain of its executive officers, directors, and their related interests. The aggregate amount of these loans was $15,725,000 and $12,567,000 at December 31, 2021 and 2020, respectively. During 2021, $5,240,000 of new loans and advances were extended and repayments totaled $2,082,000. None of these loans were past due, in nonaccrual status, or restructured at December 31, 2021.