(6) Allowance for Loan Losses

Management has an established methodology to determine the adequacy of the allowance for loan losses that assesses the risks and losses inherent in the loan portfolio. For purposes of determining the allowance for loan and lease losses, the Company has segmented certain loans in the portfolio by product type. Loss migration rates for each risk category are and calculated and used as the basis for calculating loan loss allowance allocations. Loss migration rates are calculated over a three-year period for all portfolio segments, except for the segment consisting of purchased automobile loans which is calculated over a two-year period. The use of a three-year period for loss migration analysis is a change in methodology for this period. Previously, a two-year loss migration analysis had been used for the entire portfolio. With continued improvement and stability in economic conditions, regulatory guidance recommends a longer look-back period. In addition, Civista made significant changes to consumer and commercial lending policies in the first quarter of 2012. Combined, the stable economy and now seasoned policy changes indicate a three year period is more reflective of future expectations. Management also considers certain economic factors for trends that management uses to account for the qualitative and environmental changes in risk, which affects the level of the reserve. The following economic factors are analyzed:

•

Changes in lending policies and procedures

•

Changes in experience and depth of lending and management staff

•

Changes in quality of Civista’s credit review system

•

Changes in nature and volume of the loan portfolio

•

Changes in past due, classified and nonaccrual loans and TDRs

•

Changes in economic and business conditions

•

Changes in competition or legal and regulatory requirements

•

Changes in concentrations within the loan portfolio

•

Changes in the underlying collateral for collateral dependent loans

The total allowance reflects management’s estimate of loan losses inherent in the loan portfolio at the balance sheet date. The Company considers the allowance for loan losses of $14,760 adequate to cover loan losses inherent in the loan portfolio, at September 30, 2015. The following tables present, by portfolio segment, the changes in the allowance for loan losses for the three and nine months ended September 30, 2015 and 2014.


	Commercial & Agriculture			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Residential Real Estate			Real Estate Construction			Consumer and Other			Unallocated			Total
For the nine months ended September 30, 2015

Allowance for loan losses:

Beginning balance	$	1,822		$	2,580		$	4,798		$	3,747		$	428		$	196		$	697		$	14,268
Charge-offs		(187	)		(363	)		(81	)		(779	)		—			(114	)		—			(1,524	)
Recoveries		157			223			105			289			4			38			—			816
Provision		(405	)		506			512			964			(4	)		245			(618	)		1,200

Ending Balance	$	1,387		$	2,946		$	5,334		$	4,221		$	428		$	365		$	79		$	14,760

For the nine months ended September 30, 2015, the allowance for Commercial and Agriculture loans was reduced due to decreases in specific reserves for impaired loans of $625. The decrease in specific reserves for impaired loans was the result of the resolution of an impaired loan. The Company did not incur losses with this resolution. In addition, criticized commercial & agriculture loan balances have decreased. The result was represented as a decrease in the provision. The increase in the allowance for Commercial Real Estate—Owner Occupied loans was the result of an increase in loss migration rates, which is attributable to the change in the lookback period to a three-year period. The increase in the allowance for Commercial Real Estate – Non–Owner Occupied loans was the result of an increase in loss migration rates, which is attributable to the change in the lookback period to a three-year period. The ending reserve balance for Residential Real Estate loans increased from the end of the previous year due to an increase in loss migration rates, which is attributable to the change in the look-back period to a three-year period. The increase in the allowance for Consumer and other loans increased due to an increase in loss migration rates. Unallocated reserves declined due to a change in the Company’s look-back period. The Company changed from a two-year look-back period to a three-year look-back period when calculating all but one segment’s loss migration rates during the third quarter of 2015. The change in methodology is reflected in a decline in the unallocated balance with corresponding increase in allocated balances within the reserve calculation. While loan balances are up, loss rates continue to trend downward, exclusive of the change in methodology, resulting in a lower allowance balance. While criticized loans in total have increased slightly, we have seen significant improvement in nonperforming loan balances resulting in a decline in specific reserves for impaired loans. Management feels that the unallocated amount is appropriate and within the relevant range for the allowance that is reflective of the risk in the portfolio.


	Commercial & Agriculture			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Residential Real Estate			Real Estate Construction		Consumer and Other			Unallocated		Total
For the nine months ended September 30, 2014

Allowance for loan losses:

Beginning balance	$	2,841		$	3,263		$	4,296		$	5,224		$	184	$	214		$	506	$	16,528
Charge-offs		(326	)		(1,615	)		(105	)		(1,329	)		—		(65	)		—		(3,440	)
Recoveries		238			316			34			216			5		48			—		857
Provision		(1,148	)		902			753			201			176		18			598		1,500

Ending Balance	$	1,605		$	2,866		$	4,978		$	4,312		$	365	$	215		$	1,104	$	15,445

For the nine months ended September 30, 2014, the allowance for Commercial & Agriculture loans was reduced not only by charge-offs, but also due to a decrease in both the loan balances outstanding and the specific reserve required for this type, which was driven by a decrease in the volume of impaired loans. The net result of these changes was represented as a decrease in the provision. The increase in the allowance for Commercial Real Estate loans was the result of large charge offs, which led to increased general reserves due to an increase in loss rate. The net result of these changes was represented as an increase in the provision. The allowance for Residential Real Estate loans decreased during the period due to charge-offs of loans that had a specific reserve previously applied and a significant decline in past-dues and nonaccrual loans. The net result of these changes was represented as a decrease in the allowance. The allowance for Consumer and Other loans increased slightly from the beginning of the year. While loan balances and past-dues are up, loss rates continue to decrease resulting in the allowance being relatively unchanged. Overall, we have seen continued improvement in asset quality and loss rates. However, since the process of

estimating probable credit losses requires considerable judgment, management decided to increase unallocated reserves. Unallocated reserves remain within policy guidelines as a percent of total reserves at 7.1 percent.


	Commercial & Agriculture			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied			Residential Real Estate			Real Estate Construction			Consumer and Other			Unallocated			Total
For the three months ended September 30, 2015

Allowance for loan losses:

Beginning balance	$	1,395		$	3,383		$	5,427		$	3,470		$	434		$	190		$	408		$	14,707
Charge-offs		(187	)		(164	)		(18	)		(237	)		—			(28	)		—			(634	)
Recoveries		127			13			14			124			1			8			—			287
Provision		52			(286	)		(89	)		864			(7	)		195			(329	)		400

Ending Balance	$	1,387		$	2,946		$	5,334		$	4,221		$	428		$	365		$	79		$	14,760

For the three months ended September 30, 2015, the decrease in the allowance for Commercial Real Estate – Owner Occupied was the result of a significant change in the Special Mention loss migration rate that had been adversely effected by a specific loss on one relationship that occurred in 2014. The effect of this loss as of this quarter end migrated to the Substandard pool and has less of an impact to the reserve. The ending reserve balance for Residential Real Estate loans increased due an increase in criticized loan balances and an increase in loss migration rates. The increase in the allowance for Consumer and other loans increased due to an increase in loss rates. Unallocated reserves declined due to a change in the Company’s lookback period. The Company changed from a two-year lookback period to a three-year lookback period when calculating all but one segment’s loss migration rates during the third quarter of 2015. The change in methodology is reflected in a decline in the unallocated balance with corresponding increase in allocated balances within the reserve calculation. While loan balances are up, loss rates continue to trend downward, exclusive of the change in methodology, resulting in a lower allowance balance. While criticized loans have increased slightly, we have seen significant improvement in nonperforming loan balances resulting in a decline in specific reserves for impaired loans. Management feels that the unallocated amount is appropriate and within the relevant range for the allowance that is reflective of the risk in the portfolio.


	Commercial & Agriculture			Commercial Real Estate - Owner Occupied			Commercial Real Estate - Non-Owner Occupied		Residential Real Estate			Real Estate Construction		Consumer and Other			Unallocated		Total
For the three months ended September 30, 2014

Allowance for loan losses:

Beginning balance	$	2,067		$	3,135		$	4,853	$	4,439		$	287	$	196		$	418	$	15,395
Charge-offs		(13	)		(146	)		—		(275	)		—		(22	)		—		(456	)
Recoveries		143			241			10		95			2		15			—		506
Provision		(592	)		(364	)		115		53			76		26			686		—

Ending Balance	$	1,605		$	2,866		$	4,978	$	4,312		$	365	$	215		$	1,104	$	15,445

For the three months ended September 30, 2014, the allowance for Commercial and Agriculture loans was reduced not only by charge-offs, but also due to a decrease in the loan balances outstanding, the balance of impaired loans in this segment and decreases in both the specific and general reserves required for this type. The allowance for Commercial Real Estate loans was reduced not only by charge-offs, but also due to a decrease in both the specific and general reserves required for this type. The result of these changes for each loan type was represented as a decrease in the provision. The allowance for Residential Real Estate loans was reduced as a result of charge offs, a reduction in total loans past due and a reduction in nonaccrual loans, partially offset by changes related to increased volume. The net result of these changes was represented as a decrease in the allowance. We have seen continued improvement in asset quality and loss rates. However, since the process of estimating probable credit losses requires considerable judgment, management decided to increase unallocated reserves. Unallocated reserves remain within policy guidelines as a percent of total reserves at 7.1 percent.

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of September 30, 2015 and December 31, 2014.


	Commercial & Agriculture		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Residential Real Estate		Real Estate Construction		Consumer and Other		Unallocated		Total

September 30, 2015

Allowance for loan losses:
Loans acquired with credit deterioration	$	—	$	—	$	—	$	131	$	—	$	—	$	—	$	131

Ending balance:
Individually evaluated for impairment	$	16	$	4	$	—	$	164	$	—	$	—	$	—	$	184

Ending balance:
Collectively evaluated for impairment	$	1,371	$	2,942	$	5,334	$	3,926	$	428	$	365	$	79	$	14,445


Ending balance	$	1,387	$	2,946	$	5,334	$	4,221	$	428	$	365	$	79	$	14,760

Loan balances outstanding:
Loans acquired with credit deterioration	$	16	$	30	$	—	$	381	$	—	$	—			$	427

Ending balance:
Individually evaluated for impairment	$	894	$	2,626	$	1,828	$	1,746	$	—	$	4			$	7,098

Ending balance:
Collectively evaluated for impairment	$	128,209	$	157,801	$	338,874	$	282,772	$	67,461	$	17,633			$	992,750


Ending balance	$	129,119	$	160,457	$	340,702	$	284,899	$	67,461	$	17,637			$	1,000,275


	Commercial & Agriculture		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Residential Real Estate		Real Estate Construction		Consumer and Other		Unallocated		Total

December 31, 2014

Allowance for loan losses:

Ending balance:
Individually evaluated for impairment	$	641	$	57	$	20	$	305	$	—	$	—	$	—	$	1,023

Ending balance:
Collectively evaluated for impairment	$	1,181	$	2,523	$	4,778	$	3,442	$	428	$	196	$	697	$	13,245


Ending balance	$	1,822	$	2,580	$	4,798	$	3,747	$	428	$	196	$	697	$	14,268

Loan balances outstanding:

Ending balance:
Individually evaluated for impairment	$	2,304	$	3,557	$	2,175	$	3,108	$	—	$	5			$	11,149

Ending balance:
Collectively evaluated for impairment	$	111,882	$	139,457	$	306,491	$	265,402	$	65,452	$	15,024			$	903,708


Ending balance	$	114,186	$	143,014	$	308,666	$	268,510	$	65,452	$	15,029			$	914,857

The following tables present credit exposures by internally assigned grades for the periods ended September 30, 2015 and December 31, 2014. The risk rating analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Company’s internal credit risk grading system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

•

Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

•

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

•

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that Civista will sustain some loss if the deficiencies are not corrected.

•

Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

•

Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

Generally, Residential Real Estate, Real Estate Construction and Consumer loans are not risk-graded, except when collateral is used for a business purpose.


	Commercial & Agriculture		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Residential Real Estate		Real Estate Construction		Consumer and Other		Total

September 30, 2015
Pass	$	124,065	$	147,049	$	326,014	$	111,857	$	58,947	$	8,201	$	776,133
Special Mention		862		5,180		10,998		1,783		18		—		18,841
Substandard		4,192		8,228		3,690		8,208		30		32		24,380
Doubtful		—		—		—		—		—		—		—

Ending Balance	$	129,119	$	160,457	$	340,702	$	121,848	$	58,995	$	8,233	$	819,354


	Commercial & Agriculture		Commercial Real Estate - Owner Occupied		Commercial Real Estate - Non-Owner Occupied		Residential Real Estate		Real Estate Construction		Consumer and Other		Total

December 31, 2014
Pass	$	107,903	$	128,222	$	298,237	$	100,810	$	59,584	$	5,651	$	700,407
Special Mention		3,446		5,492		6,305		697		19		—		15,959
Substandard		2,837		9,300		4,124		8,834		41		46		25,182
Doubtful		—		—		—		—		—		—		—

Ending Balance	$	114,186	$	143,014	$	308,666	$	110,341	$	59,644	$	5,697	$	741,548

The following tables present performing and nonperforming loans based solely on payment activity for the periods ended September 30, 2015 and December 31, 2014 that have not been assigned an internal risk grade. The types of loans presented here are not assigned a risk grade unless there is evidence of a problem. Payment activity is reviewed by management on a monthly basis to evaluate performance. Loans are considered to be nonperforming when they become 90 days past due or if management thinks that we may not collect all of our principal and interest. Nonperforming loans also include certain loans that have been modified in Troubled Debt Restructurings (TDRs) where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions due to economic status. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months.


	Residential Real Estate		Real Estate Construction		Consumer and Other		Total

September 30, 2015
Performing	$	163,051	$	8,466	$	9,404	$	180,921
Nonperforming		—		—		—		—

Total	$	163,051	$	8,466	$	9,404	$	180,921


	Residential Real Estate		Real Estate Construction		Consumer and Other		Total

December 31, 2014
Performing	$	158,169	$	5,808	$	9,332	$	173,309
Nonperforming		—		—		—		—

Total	$	158,169	$	5,808	$	9,332	$	173,309

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of September 30, 2015 and December 31, 2014.


September 30, 2015	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing

Commercial & Agriculture	$	34	$	941	$	286	$	1,261	$	127,858	$	129,119	$	—
Commercial Real Estate—Owner Occupied		161		37		393		591		159,866		160,457		—
Commercial Real Estate—Non-Owner Occupied		4		—		1,496		1,500		339,202		340,702		—
Residential Real Estate		912		1,788		1,971		4,671		280,228		284,899		—
Real Estate Construction		199		—		—		199		67,262		67,461		—
Consumer and Other		490		18		24		532		17,105		17,637		24

Total	$	1,800	$	2,784	$	4,170	$	8,754	$	991,521	$	1,000,275	$	24


December 31, 2014	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing

Commercial & Agriculture	$	58	$	—	$	187	$	245	$	113,941	$	114,186	$	—
Commercial Real Estate—Owner Occupied		622		251		657		1,530		141,484		143,014		—
Commercial Real Estate—Non-Owner Occupied		521		5		2,103		2,629		306,037		308,666		—
Residential Real Estate		1,923		721		2,347		4,991		263,519		268,510		—
Real Estate Construction		33		—		8		41		65,411		65,452		—
Consumer and Other		131		8		19		158		14,871		15,029		—

Total	$	3,288	$	985	$	5,321	$	9,594	$	905,263	$	914,857	$	—

The following table presents loans on nonaccrual status as of September 30, 2015 and December 31, 2014.


	2015		2014
Commercial & Agriculture	$	2,146	$	1,264
Commercial Real Estate—Owner Occupied		1,219		3,403
Commercial Real Estate—Non-Owner Occupied		1,519		2,134
Residential Real Estate		5,602		6,674
Real Estate Construction		30		41
Consumer and Other		29		42

Total	$	10,545	$	13,558

Nonaccrual Loans: Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income. A loan may be returned to accruing status only if one of three conditions are met: the loan is well-secured and none of the principal and interest has been past due for a minimum of 90 days; the loan is a TDR and has made a minimum of six months payments; or the principal and interest payments are reasonably assured and a sustained period of performance has occurred, generally six months.

Modifications: A modification of a loan constitutes a troubled debt restructuring (“TDR”) when the Company for economic or legal reasons related to a borrower’s financial difficulties grants a concession to the borrower that it would not otherwise consider. The Company offers various types of concessions when modifying a loan, however, forgiveness of principal is rarely granted. Commercial Real Estate loans modified in a TDR often involve reducing the interest rate lower than the current market rate for new debt with similar risk. Real Estate loans modified in a TDR were primarily comprised of interest rate reductions where monthly payments were lowered to accommodate the borrowers’ financial needs.

Loans modified in a TDR are typically already on non-accrual status and partial charge-offs have in some cases already been taken against the outstanding loan balance. As a result, loans modified in a TDR may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired loans that have been modified in a TDR are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates. As of September 30, 2015, TDRs accounted for $184 of the allowance for loan losses. As of December 31, 2014, TDRs accounted for $895 of the allowance for loan losses. The decrease is mainly the result of pay-offs.

Loan modifications that are considered TDRs completed during the nine-month periods ended September 30, 2015 and September 30, 2014 were as follows:


	For the Nine-Month Period Ended September 30, 2015						For the Nine-Month Period Ended September 30, 2014
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—		—	$	—	$	—
Commercial Real Estate—Owner Occupied		—		—		—		—		—		—
Commercial Real Estate—Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		—		—		—		5		245		245
Real Estate Construction		1		41		41		—		—		—
Consumer and Other		—		—		—		—		—		—

Total Loan Modifications		1	$	41	$	41		5	$	245	$	245

Loan modifications that are considered TDRs completed during the quarter ended September 30, 2015 and September 30, 2014 were as follows:


	For the Three-Month Period Ended September 30, 2015						For the Three-Month Period Ended September 30, 2014
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—		—	$	—	$	—
Commercial Real Estate		—		—		—		—		—		—
Residential Real Estate		—		—		—		3		97		97
Real Estate Construction		—		—		—		—		—		—
Consumer and Other		—		—		—		—		—		—

Total Loan Modifications		—	$	—	$	—		3	$	97	$	97

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. During both the three and nine-month periods ended September 30, 2015 and September 30, 2014, there were no defaults on loans that were modified and considered TDRs during the respective twelve previous months.

Impaired Loans: Larger (greater than $500) Commercial & Agricultural loans and Commercial Real Estate loans, all TDRs and Residential Real Estate and Consumer loans that are part of a larger relationship are tested for impairment on a quarterly basis. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance.

The following tables include the recorded investment and unpaid principal balances for impaired financing receivables with the associated allowance amount, if applicable, as of September 30, 2015 and December 31, 2014.


	September 30, 2015						December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	871	$	1,036			$	1,377	$	1,504
Commercial Real Estate - Owner Occupied		2,368		2,583				2,961		3,327
Commercial Real Estate - Non-Owner Occupied		1,828		2,094				92		140
Residential Real Estate		960		1,505				1,893		3,487
Consumer and Other		4		4				5		5

Total		6,031		7,222				6,328		8,463
With an allowance recorded:
Commercial & Agriculture		23		23	$	16		927		1,056	$	641
Commercial Real Estate - Owner Occupied		258		258		4		596		643		57
Commercial Real Estate - Non-Owner Occupied		—		—		—		2,083		2,287		20
Residential Real Estate		1,145		1,162		295		1,215		1,223		305
Real Estate Construction		—		—		—		—		—		—

Total		1,426		1,443		315		4,821		5,209		1,023
Total:
Commercial & Agriculture		894		1,059		16		2,304		2,560		641
Commercial Real Estate - Owner Occupied		2,626		2,841		4		3,557		3,970		57
Commercial Real Estate - Non-Owner Occupied		1,828		2,094		—		2,175		2,427		20
Residential Real Estate		2,105		2,667		295		3,108		4,710		305
Real Estate Construction		—		—		—		—		—		—
Consumer and Other		4		4		—		5		5		—

Total	$	7,457	$	8,665	$	315	$	11,149	$	13,672	$	1,023

The following tables include the average recorded investment and interest income recognized for impaired financing receivables for the three and nine-month periods ended September 30, 2015 and 2014.


For the nine months ended:	September 30, 2015				September 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,680	$	54	$	3,570	$	104
Commercial Real Estate - Owner Occupied		3,507		168		6,313		208
Commercial Real Estate - Non-Owner Occupied		1,997		31		2,913		31
Residential Real Estate		2,640		128		3,559		220
Real Estate Construction		20		—		—		—
Consumer and Other		5		—		7		—

Total	$	9,849	$	381	$	16,362	$	563


For the three months ended:	September 30, 2015				September 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,058	$	9	$	2,829	$	25
Commercial Real Estate - Owner Occupied		3,263		39		5,115		21
Commercial Real Estate - Non-Owner Occupied		1,870		12		2,770		(4	)
Residential Real Estate		2,450		49		3,336		74
Real Estate Construction		20		—		—		—
Consumer and Other		4		—		6		—

Total	$	8,665	$	109	$	14,056	$	116

Foreclosed Assets Held For Sale

Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in other assets on the Consolidated Balance Sheet. As of September 30, 2015 and December 31, 2014, a total of $494 and $560, respectively of foreclosed assets were included with other assets. As of September 30, 2015, included within the foreclosed assets is $494 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of September 30, 2015, the Company had initiated formal foreclosure procedures on $669 of consumer residential mortgages.