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Accounting for Certain Loans Acquired in a Transfer | 9 Months Ended
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Sep. 30, 2020
Transfers and Servicing [Abstract] |
Accounting for Certain Loans Acquired in a Transfer | Accounting for Certain Loans Acquired in a Transfer The Company has acquired loans in acquisitions, whereby the transferred loans had evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include information such as past–due and non–accrual status, borrower credit scores and recent loan–to–value percentages prior to January 1, 2020. Purchased credit–impaired loans are accounted for under the accounting guidance for loans and debt securities acquired with deteriorated credit quality (ASC 310–30) and initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans is not carried over and recorded at the acquisition date. Management estimated the cash flows expected to be collected at acquisition using our internal risk models, which incorporate the estimate of current key assumptions, such as default rates, severity and prepayment speeds. The carrying amounts of those loans included in the balance sheet amounts of loans receivable as of December 31, 2019 are as follows:
| December 31, 2019
| Commercial |  | Real Estate |  | Consumer |  | Outstanding Balance |  | Allowance for Loan Losses |  | Carrying Amount
Heartland | $ | 197 |  |  | $ | 99 |  |  | $ | — |  |  | $ | 296 |  |  | $ | — |  |  | $ | 296 |
Summit | 88 |  |  | 473 |  |  | — |  |  | 561 |  |  | — |  |  | 561 |
Peoples | 229 |  |  | 35 |  |  | — |  |  | 264 |  |  | — |  |  | 264 |
Kosciusko | 244 |  |  | 131 |  |  | — |  |  | 375 |  |  | — |  |  | 375 |
LaPorte | 353 |  |  | 793 |  |  | 20 |  |  | 1,166 |  |  | — |  |  | 1,166 |
Lafayette | 1,867 |  |  | — |  |  | — |  |  | 1,867 |  |  | — |  |  | 1,867 |
Wolverine | 2,289 |  |  | — |  |  | — |  |  | 2,289 |  |  | — |  |  | 2,289 |
Salin | 4,938 |  |  | 1,912 |  |  | 962 |  |  | 7,812 |  |  | 133 |  |  | 7,679 |
Total | $ | 10,205 |  |  | $ | 3,443 |  |  | $ | 982 |  |  | $ | 14,630 |  |  | $ | 133 |  |  | $ | 14,497 |
Accretable yield, or income expected to be collected for the nine months ended September 30, 2019 is as follows:
| Nine Months Ended September 30, 2019
| Beginning balance |  | Additions |  | Accretion |  | Reclassification from nonaccretable difference |  | Disposals |  | Ending balance
Heartland | $ | 174 |  |  | $ | — |  |  | $ | (24) |  |  | $ | — |  |  | $ | — |  |  | $ | 150 |
Summit | 42 |  |  | — |  |  | (7) |  |  | — |  |  | (11) |  |  | 24 |
Kosciusko | 300 |  |  | — |  |  | (49) |  |  | — |  |  | (2) |  |  | 249 |
LaPorte | 829 |  |  | — |  |  | (85) |  |  | — |  |  | 4 |  |  | 748 |
Lafayette | 609 |  |  | — |  |  | (97) |  |  | — |  |  | (193) |  |  | 319 |
Wolverine | 698 |  |  | — |  |  | (243) |  |  | — |  |  | (306) |  |  | 149 |
Salin | — |  |  | 2,002 |  |  | (375) |  |  | — |  |  | (30) |  |  | 1,597 |
Total | $ | 2,652 |  |  | $ | 2,002 |  |  | $ | (880) |  |  | $ | — |  |  | $ | (538) |  |  | $ | 3,236 |
During the nine months ended September 30, 2019, the Company increased the allowance for loan losses on purchased loans by a charge to the income statement of $10,000.

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- Definition The entire disclosure for certain contractual rights to receive money on demand or on fixed or determinable dates with evidence of deterioration of credit quality since origination that were acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 30 -URI http://asc.fasb.org/subtopic&trid=2196854 + Details
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- References No definition available. + Details
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