The Company’s loan portfolio is grouped into classes to allow management to monitor the performance by the borrower and to monitor the yield on the portfolio. Consistent with ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Loan Losses, the segments are further broken down into classes to allow for differing risk characteristics within a segment.

The Company has various types of commercial real estate loans, which have differing levels of credit risk. Owner occupied commercial real estate loans are generally dependent upon the successful operation of the borrower’s business, with the cash flows generated from the business being the primary source of repayment of the loan. If the business suffers a downturn in sales or profitability, the borrower’s ability to repay the loan could be in jeopardy.

Non-owner occupied and multi-family commercial real estate loans and non-owner occupied residential loans present a different credit risk to the Company than owner occupied commercial real estate loans, as the repayment of the loan is dependent upon the borrower’s ability to generate a sufficient level of occupancy to produce rental income that exceeds debt service requirements and operating expenses. Lower occupancy or lease rates may result in a reduction in cash flows, which hinders the ability of the borrower to meet debt service requirements, and may result in lower collateral values. The Company generally recognizes that greater risk is inherent in these credit relationships as compared to owner occupied loans mentioned above.

Acquisition and development loans consist of 1-4 family residential construction and commercial and land development loans. The risk of loss on these loans is largely dependent on the Company’s ability to assess the property’s value at the completion of the project, which should exceed the property’s construction costs. During the construction phase, a number of factors could potentially negatively impact the collateral value, including cost overruns, delays in completing the project, competition, and real estate market conditions which may change based on the supply of similar properties in the area. In the event the collateral value at the completion of the project is not sufficient to cover the outstanding loan balance, the Company must rely upon other repayment sources, including, if any, the guarantors of the project or other collateral securing the loan.

Commercial and industrial loans include advances to local and regional businesses for general commercial purposes and include permanent and short-term working capital, machinery and equipment financing, and may be either in the form of lines of credit or term loans. Although commercial and industrial loans may be unsecured to our highest-rated borrowers, the majority of these loans are secured by the borrower’s accounts receivable, inventory and machinery and equipment. In a significant number of these loans, the collateral also includes the business real estate or the business owner’s personal real estate or assets. Commercial and industrial loans present credit exposure to the Company, as they are more susceptible to risk of loss during a downturn in the economy as borrowers may have greater difficulty in meeting their debt service requirements and the value of the collateral may decline. The Company attempts to mitigate this risk through its underwriting standards, including evaluating the creditworthiness of the borrower and, to the extent available, credit ratings on the business. Additionally, monitoring of the loans through annual renewals and meetings with the borrowers are typical. However, these procedures cannot eliminate the risk of loss associated with commercial and industrial lending. At June 30, 2020 and December 31, 2019, commercial and industrial loans include $447.2 million and $0, respectively, of loans, net of deferred fees, originated through the U.S. Small Business Administration Paycheck Protection Program ("SBA PPP").

The Company originates loans to its retail customers, including fixed-rate and adjustable first lien mortgage loans with the underlying 1-4 family owner occupied residential property securing the loan. The Company’s risk exposure is minimized in these types of loans through the evaluation of the creditworthiness of the borrower, including credit scores and debt-to-income ratios, and underwriting standards which limit the loan-to-value ratio to generally no more than 80% upon loan origination, unless the borrower obtains private mortgage insurance.

Home equity loans, including term loans and lines of credit, present a slightly higher risk to the Company than 1-4 family first liens, as these loans can be first or second liens on 1-4 family owner occupied residential property, but can have loan-to-value ratios of no greater than 90% of the value of the real estate taken as collateral. The creditworthiness of the borrower is considered including credit scores and debt-to-income ratios.

Installment and other loans’ credit risk are mitigated through prudent underwriting standards, including evaluation of the creditworthiness of the borrower through credit scores and debt-to-income ratios and, if secured, the collateral value of the assets. These loans can be unsecured or secured by assets the value of which may depreciate quickly or may fluctuate, and may present a greater risk to the Company than 1-4 family residential loans.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted. The CARES Act established the SBA PPP. The SBA PPP is intended to provide economic relief to small businesses nationwide adversely impacted under the COVID-19 Emergency Declaration issued on March 13, 2020. The SBA PPP, which began on April 3, 2020, provides small businesses with funds to cover up to 24 weeks of payroll costs and other expenses, including benefits. It also provides for forgiveness of up to the full principal amount of qualifying loans. The Bank closed and funded almost 2,800 PPP loans for a total loan amount of $459.6 million in the three months ended June 30, 2020. As these loans are 100% guaranteed by the SBA, there is no associated allowance for loan losses at June 30, 2020. These loans resulted in net fee income of $13.2 million to be recognized through net interest income over the life of the loans, which is between two and five years. During the three and six months ended June 30, 2020, the Company recognized $1.9 million of net deferred fees, included in interest income on loans on the condensed consolidated statements of income. In addition, in an effort to assist clients which were negatively impacted by the COVID-19 pandemic, the Bank offered various mitigation options, including a loan payment deferral program. Under this program, most commercial deferrals were for a 90-day period, while most consumer deferrals were for a 180-day period. As of June 30, 2020, the Company processed loan deferrals under this program for commercial and consumer clients with a total loan balance of $218.1 million and $21.2 million, respectively. In accordance with the revised Interagency Statement on Loan Modifications by Financial Institutions Working with Customers Affected by the Coronavirus issued on April 7, 2020, these deferrals are exempt from TDR status as they meet the specified requirements.


	June 30, 2020		December 31, 2019
Commercial real estate:
Owner occupied	$	164,442	$	170,884
Non-owner occupied	390,980		361,050
Multi-family	111,016		106,893
Non-owner occupied residential	116,531		120,038
Acquisition and development:
1-4 family residential construction	7,966		15,865
Commercial and land development	50,220		41,538
Commercial and industrial ⁽¹⁾	665,312		214,554
Municipal	34,276		47,057
Residential mortgage:
First lien	295,736		336,372
Home equity - term	11,944		14,030
Home equity - lines of credit	160,842		165,314
Installment and other loans	32,052		50,735
Total loans	$	2,041,317	$	1,644,330

In order to monitor ongoing risk associated with its loan portfolio and specific loans within the segments, management uses an internal grading system. The first several rating categories, representing the lowest risk to the Bank, are combined and given a “Pass” rating. Management generally follows regulatory definitions in assigning criticized ratings to loans, including "Special Mention," "Substandard," "Doubtful" or "Loss." The Special Mention category includes loans that have potential weaknesses that may, if not monitored or corrected, weaken the asset or inadequately protect the Bank's position at some future date. These assets pose elevated risk, but their weakness does not yet justify a more severe, or classified rating. Substandard loans are classified as they have a well-defined weakness, or weaknesses that jeopardize liquidation of the debt. These loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans include loans that management has determined not to be impaired, as well as loans considered to be impaired. A Doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as Loss is deferred. Loss loans are considered uncollectible, as the borrowers are often in bankruptcy, have suspended debt repayments, or have ceased business operations. Once a loan is classified as Loss, there is little prospect of collecting the loan’s principal or interest and it is charged-off.

The Company has a loan review policy and program which is designed to identify and monitor risk in the lending function. The Management ERM Committee, comprised of executive officers and loan department personnel, is charged with the oversight of overall credit quality and risk exposure of the Company's loan portfolio. This includes the monitoring of the lending activities of all Company personnel with respect to underwriting and processing new loans and the timely follow-up and corrective action for loans showing signs of deterioration in quality. A loan review program provides the Company with an independent review of the commercial loan portfolio on an ongoing basis. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as extended delinquencies, bankruptcy, repossession or death of the borrower occurs, which heightens awareness as to a possible credit event.

Internal loan reviews are completed annually on all commercial relationships with a committed loan balance in excess of $500 thousand, which includes confirmation of risk rating by an independent credit officer. In addition, all commercial relationships greater than $500 thousand rated Substandard, Doubtful or Loss are reviewed quarterly and corresponding risk ratings are reaffirmed by the Company's Problem Loan Committee, with subsequent reporting to the Management ERM Committee and the Board of Directors.


	Pass		Special Mention		Non-Impaired Substandard		Impaired - Substandard		Doubtful		PCI Loans		Total
June 30, 2020
Commercial real estate:
Owner occupied	$	144,332	$	7,223	$	4,666	$	3,371	$	—	$	4,850	$	164,442
Non-owner occupied	345,176		45,468		—		—		—		336		390,980
Multi-family	95,478		14,796		662		80		—		—		111,016
Non-owner occupied residential	108,985		4,404		1,357		283		—		1,502		116,531
Acquisition and development:
1-4 family residential construction	7,844		122		—		—		—		—		7,966
Commercial and land development	38,947		9,895		541		837		—		—		50,220
Commercial and industrial	636,604		15,372		9,222		708		—		3,406		665,312
Municipal	30,025		4,251		—		—		—		—		34,276
Residential mortgage:
First lien	287,633		—		—		2,461		—		5,642		295,736
Home equity - term	11,841		—		72		11		—		20		11,944
Home equity - lines of credit	160,036		175		35		596		—		—		160,842
Installment and other loans	31,950		—		—		17		—		85		32,052
	$	1,898,851	$	101,706	$	16,555	$	8,364	$	—	$	15,841	$	2,041,317

December 31, 2019
Commercial real estate:
Owner occupied	$	151,161	$	4,513	$	3,163	$	5,872	$	—	$	6,175	$	170,884
Non-owner occupied	342,753		17,152		—		—		—		1,145		361,050
Multi-family	100,361		4,822		682		345		—		683		106,893
Non-owner occupied residential	111,697		4,534		1,115		235		—		2,457		120,038
Acquisition and development:
1-4 family residential construction	15,865		—		—		—		—		—		15,865
Commercial and land development	39,939		206		1,393		—		—		—		41,538
Commercial and industrial	198,951		1,133		8,899		1,763		—		3,808		214,554
Municipal	42,649		4,408		—		—		—		—		47,057
Residential mortgage:
First lien	323,040		978		—		2,590		—		9,764		336,372
Home equity - term	13,774		74		149		13		—		20		14,030
Home equity - lines of credit	164,469		74		38		733		—		—		165,314
Installment and other loans	50,497		—		—		85		—		153		50,735
	$	1,555,156	$	37,894	$	15,439	$	11,636	$	—	$	24,205	$	1,644,330

management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Generally, loans that are more than 90 days past due are deemed impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed to determine if the loan should be placed on nonaccrual status. Nonaccrual loans in the commercial and commercial real estate portfolios and any TDRs are, by definition, deemed to be impaired. Impairment is measured on a loan-by-loan basis for commercial, construction and restructured loans by either the present value of the expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. A loan is collateral dependent if the repayment of the loan is expected to be provided solely by the underlying collateral. For loans that are deemed to be impaired for extended periods of time, periodic updates on fair values are obtained, which may include updated appraisals. Updated fair values are incorporated into the impairment analysis in the next reporting period.

Loan charge-offs, which may include partial charge-offs, are taken on an impaired loan that is collateral dependent if the loan’s carrying balance exceeds its collateral’s appraised value, the loan has been identified as uncollectible, and it is deemed to be a confirmed loss. Typically, impaired loans with a charge-off or partial charge-off will continue to be considered impaired, unless the note is split into two, and management expects the performing note to continue to perform and is adequately secured. The second, or non-performing note, would be charged-off. Generally, an impaired loan with a partial charge-off may continue to have an impairment reserve on it after the partial charge-off, if factors warrant.

At June 30, 2020 and December 31, 2019, nearly all of the Company’s loan impairments were measured based on the estimated fair value of the collateral securing the loan, except for TDRs. By definition, TDRs are considered impaired. All TDR impairment analyses are initially based on discounted cash flows for those loans. For real estate loans, collateral generally consists of commercial real estate, but in the case of commercial and industrial loans, it could also consist of accounts receivable, inventory, equipment or other business assets. Commercial and industrial loans may also have real estate collateral.

Updated appraisals are generally required every 18 months for classified commercial loans in excess of $250 thousand. The “as is" value provided in the appraisal is often used as the fair value of the collateral in determining impairment, unless circumstances, such as subsequent improvements, approvals, or other circumstances, dictate that another value than that provided by the appraiser is more appropriate.

Generally, impaired commercial loans secured by real estate, other than performing TDRs, are measured at fair value using certified real estate appraisals that had been completed within the last 18 months. Appraised values are discounted for estimated costs to sell the property and other selling considerations to arrive at the property’s fair value. In those situations in which it is determined an updated appraisal is not required for loans individually evaluated for impairment, fair values are based on either an existing appraisal or a discounted cash flow analysis as determined by management. The approaches are discussed below:

•Existing appraisal – if the existing appraisal provides a strong loan-to-value ratio (generally 70% or lower) and, after consideration of market conditions and knowledge of the property and area, it is determined by the Credit Administration staff that there has not been a significant deterioration in the collateral value, the existing certified appraised value may be used. Discounts to the appraised value, as deemed appropriate for selling costs, are factored into the fair value.

Collateral on certain impaired loans is not limited to real estate, and may consist of accounts receivable, inventory, equipment or other business assets. Estimated fair values are determined based on borrowers’ financial statements, inventory ledgers, accounts receivable aging or appraisals from individuals with knowledge in the business. Stated balances are generally discounted for the age of the financial information or the quality of the assets. In determining fair value, liquidation discounts are applied to this collateral based on existing loan evaluation policies.

The Company distinguishes substandard loans on both an impaired and non-impaired basis, as it places less emphasis on a loan’s classification, and increased reliance on whether the loan was performing in accordance with the contractual terms. A substandard classification does not automatically meet the definition of impaired. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual extensions of credit classified as substandard. As a result, the Company’s methodology includes an evaluation of certain accruing commercial real estate, acquisition and development, and commercial and industrial loans rated substandard to be collectively evaluated for impairment. Although the Company believes

The following table, which excludes PCI loans, summarizes impaired loans by segment and class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at June 30, 2020 and December 31, 2019. The recorded investment in loans excludes accrued interest receivable due to insignificance. Related allowances established generally pertain to those loans in which loan forbearance agreements were in the process of being negotiated or updated appraisals were pending, and any partial charge-off will be recorded when final information is received.


	Impaired Loans with a Specific Allowance										Impaired Loans with No Specific Allowance
	Recorded Investment (Book Balance)		Unpaid Principal Balance (Legal Balance)		Related Allowance		Recorded Investment (Book Balance)		Unpaid Principal Balance (Legal Balance)
June 30, 2020
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	3,371	$	4,124
Non-owner occupied	—		—		—		—		313
Multi-family	—		—		—		80		—
Non-owner occupied residential	—		—		—		283		399
Acquisition and development:

Commercial and land development	—		—		—		837		875
Commercial and industrial	—		—		—		708		1,858
Residential mortgage:
First lien	688		688		35		1,773		3,083
Home equity—term	—		—		—		11		14
Home equity—lines of credit	—		—		—		596		830
Installment and other loans	—		—		—		17		28
	$	688	$	688	$	35	$	7,676	$	11,524
December 31, 2019
Commercial real estate:
Owner-occupied	$	—	$	—	$	—	$	5,872	$	8,086

Multi-family	—		—		—		345		569
Non-owner occupied residential	—		—		—		235		422



Commercial and industrial	—		—		—		1,763		3,361
Residential mortgage:
First lien	425		425		36		2,165		3,164
Home equity—term	—		—		—		13		15
Home equity—lines of credit	—		—		—		733		1,077
Installment and other loans	—		—		—		85		97
	$	425	$	425	$	36	$	11,211	$	16,791


	2020						2019
	Average Impaired Balance		Interest Income Recognized		Average Impaired Balance		Interest Income Recognized
Three Months Ended June 30,
Commercial real estate:
Owner-occupied	$	4,639	$	—	$	1,770	$	1
Non-owner occupied	169		—		—		—
Multi-family	270		—		118		—
Non-owner occupied residential	521		—		282		—
Acquisition and development:

Commercial and land development	837		—		—		—
Commercial and industrial	1,320		—		260		—
Residential mortgage:
First lien	3,177		12		2,512		14
Home equity – term	12		—		13		—
Home equity - lines of credit	704		1		709		1
Installment and other loans	18		—		9		—
	$	11,667	$	13	$	5,673	$	16
Six Months Ended June 30,
Commercial real estate:
Owner occupied	$	5,143	$	1	$	1,819	$	1
Non-owner occupied	96		—		—		—
Multi-family	301		—		122		—
Non-owner occupied residential	396		—		291		—
Acquisition and development:

Commercial and land development	478		—		—		—
Commercial and industrial	1,384		—		269		—
Residential mortgage:
First lien	2,874		24		2,652		29
Home equity - term	12		—		14		—
Home equity - lines of credit	715		1		736		1
Installment and other loans	34		—		8		—
	$	11,433	$	26	$	5,911	$	31


	June 30, 2020				December 31, 2019
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Accruing:
Commercial real estate:
Owner occupied	1	$	28	1	$	30



Residential mortgage:
First lien	9	916		9	931
Home equity - lines of credit	1	16		1	18
	11	960		11	979
Nonaccruing:
Commercial real estate:
Owner occupied	1	215		4	1,909



Residential mortgage:
First lien	5	337		5	359

	6	552		9	2,268
	17	$	1,512	20	$	3,247


			Days Past Due
	Current		30-59		60-89		90+ (still accruing)		Total Past Due		Non- Accrual		Total Loans
June 30, 2020
Commercial real estate:
Owner occupied	$	155,868	$	113	$	268	$	—	$	381	$	3,343	$	159,592
Non-owner occupied	390,644		—		—		—		—		—		390,644
Multi-family	110,936		—		—		—		—		80		111,016
Non-owner occupied residential	114,303		106		286		51		443		283		115,029
Acquisition and development:
1-4 family residential construction	7,966		—		—		—		—		—		7,966
Commercial and land development	49,356		27		—		—		27		837		50,220
Commercial and industrial	661,099		99		—		—		99		708		661,906
Municipal	34,276		—		—		—		—		—		34,276
Residential mortgage:
First lien	284,370		2,038		1,877		264		4,179		1,545		290,094
Home equity - term	11,826		87		—		—		87		11		11,924
Home equity - lines of credit	159,724		273		265		—		538		580		160,842
Installment and other loans	31,889		42		13		6		61		17		31,967
Subtotal	2,012,257		2,785		2,709		321		5,815		7,404		2,025,476
Loans acquired with credit deterioration:
Commercial real estate:
Owner occupied	4,850		—		—		—		—		—		4,850
Non-owner occupied	336		—		—		—		—		—		336

Non-owner occupied residential	1,270		—		66		166		232		—		1,502



Commercial and industrial	3,382		—		—		24		24		—		3,406

Residential mortgage:
First lien	3,922		1,304		18		398		1,720		—		5,642
Home equity - term	20		—		—		—		—		—		20

Installment and other loans	66		1		18		—		19		—		85
Subtotal	13,846		1,305		102		588		1,995		—		15,841
	$	2,026,103	$	4,090	$	2,811	$	909	$	7,810	$	7,404	$	2,041,317



			Days Past Due
	Current		30-59		60-89		90+ (still accruing)		Total Past Due		Non- Accrual		Total Loans
December 31, 2019
Commercial real estate:
Owner occupied	$	158,723	$	144	$	—	$	—	$	144	$	5,842	$	164,709
Non-owner occupied	359,425		480		—		—		480		—		359,905
Multi-family	105,865		—		—		—		—		345		106,210
Non-owner occupied residential	116,370		841		66		69		976		235		117,581
Acquisition and development:
1-4 family residential construction	15,587		278		—		—		278		—		15,865
Commercial and land development	40,403		1,135		—		—		1,135		—		41,538
Commercial and industrial	208,668		315		—		—		315		1,763		210,746
Municipal	47,057		—		—		—		—		—		47,057
Residential mortgage:
First lien	314,473		9,092		1,234		150		10,476		1,659		326,608
Home equity - term	13,993		—		4		—		4		13		14,010
Home equity - lines of credit	163,907		417		275		—		692		715		165,314
Installment and other loans	50,224		236		37		—		273		85		50,582
Subtotal	1,594,695		12,938		1,616		219		14,773		10,657		1,620,125
Loans acquired with credit deterioration:
Commercial real estate:
Owner occupied	6,015		—		129		31		160		—		6,175
Non-owner occupied	564		—		—		581		581		—		1,145
Multi-family	683		—		—		—		—		—		683
Non-owner occupied residential	1,710		105		111		531		747		—		2,457



Commercial and industrial	3,792		—		—		16		16		—		3,808

Residential mortgage:
First lien	6,308		1,857		745		854		3,456		—		9,764
Home equity - term	16		4		—		—		4		—		20

Installment and other loans	131		22		—		—		22		—		153
Subtotal	19,219		1,988		985		2,013		4,986		—		24,205
	$	1,613,914	$	14,926	$	2,601	$	2,232	$	19,759	$	10,657	$	1,644,330

The Company maintains its ALL at a level management believes adequate for probable incurred credit losses. The ALL is established and maintained through a provision for loan losses charged to earnings. Quarterly, management assesses the adequacy of the ALL utilizing a defined methodology which considers specific credit evaluation of impaired loans as discussed above, past loan loss historical experience, and qualitative factors. Management believes its approach properly addresses relevant accounting guidance for loans individually identified as impaired and for loans collectively evaluated for impairment, and other bank regulatory guidance.

National and Local Economic Conditions – including trends in the consumer price index, unemployment rates, the housing price index, housing statistics compared to the prior year, bankruptcy rates, regulatory and legal environment risks and competition. During the three and six months ended June 30, 2020, this factor was increased for the commercial and consumer portfolios to account for the negative economic impact of the COVID-19 pandemic.


	Commercial																		Consumer
	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Municipal		Total		Residential Mortgage		Installment and Other		Total		Unallocated		Total
Three Months Ended
June 30, 2020
Balance, beginning of period	$	8,420	$	1,033	$	2,647	$	99	$	12,199	$	3,139	$	294	$	3,433	$	171	$	15,803
Provision for loan losses	877		31		590		(24)		1,474		323		102		425		1		1,900

Charge-offs	—		—		(421)		—		(421)		(18)		(14)		(32)		—		(453)
Recoveries	50		5		100		—		155		108		4		112		—		267
Balance, end of period	$	9,347	$	1,069	$	2,916	$	75	$	13,407	$	3,552	$	386	$	3,938	$	172	$	17,517
June 30, 2019
Balance, beginning of period	$	7,025	$	969	$	1,814	$	98	$	9,906	$	3,765	$	217	$	3,982	$	395	$	14,283
Provision for loan losses	(221)		39		325		(4)		139		(32)		40		8		53		200
Charge-offs	—		—		(47)		—		(47)		(25)		(51)		(76)		—		(123)
Recoveries	43		—		28		—		71		26		3		29		—		100
Balance, end of period	$	6,847	$	1,008	$	2,120	$	94	$	10,069	$	3,734	$	209	$	3,943	$	448	$	14,460
Six Months Ended
June 30, 2020
Balance, beginning of period	$	7,634	$	959	$	2,356	$	100	$	11,049	$	3,147	$	319	$	3,466	$	140	$	14,655
Provision for loan losses	1,260		102		912		(25)		2,249		400		144		544		32		2,825

Charge-offs	—		—		(496)		—		(496)		(109)		(86)		(195)		—		(691)
Recoveries	453		8		144		—		605		114		9		123		—		728
Balance, end of period	$	9,347	$	1,069	$	2,916	$	75	$	13,407	$	3,552	$	386	$	3,938	$	172	$	17,517
June 30, 2019
Balance, beginning of period	$	6,876	$	817	$	1,656	$	98	$	9,447	$	3,753	$	244	$	3,997	$	570	$	14,014
Provision for loan losses	(118)		189		484		(4)		551		157		14		171		(122)		600
Charge-offs	(25)		—		(90)		—		(115)		(271)		(71)		(342)		—		(457)
Recoveries	114		2		70		—		186		95		22		117		—		303
Balance, end of period	$	6,847	$	1,008	$	2,120	$	94	$	10,069	$	3,734	$	209	$	3,943	$	448	$	14,460


	Commercial																		Consumer
	Commercial Real Estate		Acquisition and Development		Commercial and Industrial		Municipal		Total		Residential Mortgage		Installment and Other		Total		Unallocated		Total
June 30, 2020
Loans allocated by:
Individually evaluated for impairment	$	3,734	$	837	$	708	$	—	$	5,279	$	3,068	$	17	$	3,085	$	—	$	8,364
Collectively evaluated for impairment	779,235		57,349		664,604		34,276		1,535,464		465,454		32,035		497,489		—		2,032,953

	$	782,969	$	58,186	$	665,312	$	34,276	$	1,540,743	$	468,522	$	32,052	$	500,574	$	—	$	2,041,317
ALL allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	35	$	—	$	35	$	—	$	35
Collectively evaluated for impairment	9,347		1,069		2,916		75		13,407		3,517		386		3,903		172		17,482

	$	9,347	$	1,069	$	2,916	$	75	$	13,407	$	3,552	$	386	$	3,938	$	172	$	17,517
December 31, 2019
Loans allocated by:
Individually evaluated for impairment	$	6,452	$	—	$	1,763	$	—	$	8,215	$	3,336	$	85	$	3,421	$	—	$	11,636
Collectively evaluated for impairment	752,413		57,403		212,791		47,057		1,069,664		512,380		50,650		563,030		—		1,632,694
	$	758,865	$	57,403	$	214,554	$	47,057	$	1,077,879	$	515,716	$	50,735	$	566,451	$	—	$	1,644,330
ALL allocated by:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	36	$	—	$	36	$	—	$	36
Collectively evaluated for impairment	7,634		959		2,356		100		11,049		3,111		319		3,430		140		14,619
	$	7,634	$	959	$	2,356	$	100	$	11,049	$	3,147	$	319	$	3,466	$	140	$	14,655


	Three Months Ended						Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
Accretable yield, beginning of period	$	4,414	$	1,894	$	6,950	$	2,065
Additions ⁽¹⁾	—		3,497		570		3,497
Accretion of income	(1,315)		(1,221)		(1,913)		(1,392)
Reclassifications from nonaccretable difference due to improvement in expected cash flows	1,104		617		1,121		617
Other changes, net ⁽²⁾	(21)		201		(2,546)		201
Accretable yield, end of period	$	4,182	$	4,988	$	4,182	$	4,988