NOTE 5 - 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 losses, the Company has segmented certain loans in the portfolio by product type. Loans are segmented into the following pools: Commercial and Agriculture loans, Commercial Real Estate – Owner Occupied loans, Commercial Real Estate – Non-owner Occupied loans, Residential Real Estate loans, Real Estate Construction loans, Farm Real Estate loans and Consumer and Other loans. Loss migration rates for each risk category are 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. Starting in the third quarter of 2015, loss migration rates were calculated over a three-year period for all portfolio segments, except for the segment consisting of purchased automobile loans which was calculated over a two-year period and subsequently changed during the first quarter of 2016 to a three-year 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 credit review system

•

Changes in the 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 consolidated balance sheet date. The Company considers the allowance for loan losses of $13,305 adequate to cover loan losses inherent in the loan portfolio, at December 31, 2016. The following tables present, by portfolio segment, the changes in the allowance for loan losses, the ending allocation of the allowance for loan losses and the loan balances outstanding for the years ended December 31, 2016, December 31, 2015 and December 31, 2014. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors.

Allowance for loan losses:


December 31, 2016	Beginning balance		Charge-offs		Recoveries		Provision (Credit)		Ending Balance
Commercial & Agriculture	$	1,478	$	(880)	$	105	$	1,315	$	2,018
Commercial Real Estate:
Owner Occupied		2,467		(228)		56		(124)		2,171
Non-Owner Occupied		4,657		(23)		1,372		(1,400)		4,606
Residential Real Estate		4,086		(455)		479		(1,021)		3,089
Real Estate Construction		371		(115)		12		152		420
Farm Real Estate		538		—		—		(96)		442
Consumer and Other		382		(125)		46		11		314
Unallocated		382		—		—		(137)		245

Total	$	14,361	$	(1,826)	$	2,070	$	(1,300)	$	13,305

For the year ended December 31, 2016, the increase in allowance for Commercial & Agriculture loans was due to an increase in general reserves as a result of higher balances and higher loss rates in criticized loans. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced not only by a decrease in specific reserves required for this type, but also by a decrease in general reserves due to decreases in classified, non-accrual loans and lower loss rates for this type. The result of these changes was represented as a decrease in the provision. The decrease in allowance for Commercial Real Estate – Non-Owner Occupied loans was the result of a decrease in general reserves required as a result of lower loss rates and improvement in past due, classified and non-accrual loans for this type. In addition, a payoff on a previously charged down loan was received resulting in a recovery of approximately $1,303. The net result was represented as a decrease in the provision. The allowance for Residential Real Estate loans was reduced by a decrease in general reserves required for this type as a result of a decrease in loss rates, represented by a decrease in the provision. The allowance for Real Estate Construction loans increased due to an increase in loss rates for this type of loan, which was represented as an increase in the provision. The allowance for Farm Real Estate loans was reduced by a decrease in general reserves required for this type as a result of lower outstanding loan balances and a decrease in loss rates. The result of these changes was represented as a decrease in the provision. 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.

Allowance for loan losses:


December 31, 2015	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,819	$	(190	)	$	182	$	(333	)	$	1,478
Commercial Real Estate:
Owner Occupied		2,221		(523	)		187		582			2,467
Non-Owner Occupied		4,334		(81	)		115		289			4,657
Residential Real Estate		3,747		(1,135	)		331		1,143			4,086
Real Estate Construction		428		—			5		(62	)		371
Farm Real Estate		822		—			76		(360	)		538
Consumer and Other		200		(120	)		46		256			382
Unallocated		697		—			—		(315	)		382

Total	$	14,268	$	(2,049	)	$	942	$	1,200		$	14,361

For the year ended December 31, 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 primarily the result of the resolution of an impaired loan. The Company did not incur losses with this resolution. 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 allowance for Real Estate Construction loans decreased as a result of decreasing loan balances. The allowance for Farm Real Estate loans decreased as a result of decreasing loan balances and loss rates offset by an increase in classified loans. The increase in the allowance for Consumer and other loans increased due to an increase in loss rates, which is attributable to the change in the look-back period. Unallocated reserves declined due to a change in the Company’s lookback period. As described above, 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 resulted in a decline in the unallocated balance with corresponding increase in allocated balances within the reserve calculation. While loan balances were up, loss rates continued to trend downward, exclusive of the change in methodology, resulting in a lower allowance balance. While criticized loans increased slightly, we saw significant improvement in nonperforming loan balances resulting in a decline in specific reserves for impaired loans. As of December 31, 2015, management felt that the unallocated amount was appropriate and within the relevant range for the allowance that was reflective of the risk in the portfolio.

Allowance for loan losses:


December 31, 2014	Beginning balance		Charge-offs		Recoveries		Provision (Credit)		Ending Balance
Commercial & Agriculture	$	2,838	$	(338)	$	251	$	(932)	$	1,819
Commercial Real Estate:
Owner Occupied		2,931		(1,661)		360		591		2,221
Non-Owner Occupied		3,888		(198)		50		594		4,334
Residential Real Estate		5,224		(2,449)		293		679		3,747
Real Estate Construction		184		—		6		238		428
Farm Real Estate		740		—		—		82		822
Consumer and Other		217		(135)		61		57		200
Unallocated		506		—		—		191		697

Total	$	16,528	$	(4,781)	$	1,021	$	1,500	$	14,268

For the year ended December 31, 2014, the allowance for Commercial and 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 and classified loans. The net result of these changes was represented as a decrease in the provision. The decrease in the allowance for Commercial Real Estate—Owner Occupied loans was the result of eleven charge-offs, but also due to a decrease in loan balances outstanding and a decline in nonaccrual loans. The result of these changes was represented as a decrease in the allowance. The increase in the allowance for Commercial Real Estate—Non-Owner Occupied loans was the result of increasing loan balances and increased past-due balances. The allowance for Real Estate Construction loans increased as a result of a significant increase in loan balances. The ending reserve balance for Residential Real Estate loans declined from the end of the previous year due to charge-offs of loans that had a specific reserve previously applied. Additionally, a single relationship resulted in losses of $1,436 related to protecting the Company’s collateral. The net result of the changes was represented as a decrease in the allowance. The allowance for Consumer and Other loans decreased slightly during the year. While loan balances were up, loss rates continued to decrease resulting in the allowance being slightly lower. While we saw improvement in asset quality, given the uncertainty in the economy, management determined that it was appropriate to maintain unallocated reserves at a slightly higher level as of December 31, 2014.


December 31, 2016	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	86	$	82	$	1,850	$	2,018
Commercial Real Estate:
Owner Occupied		—		4		2,167		2,171
Non-Owner Occupied		—		—		4,606		4,606
Residential Real Estate		89		102		2,898		3,089
Real Estate Construction		—		—		420		420
Farm Real Estate		—		—		442		442
Consumer and Other		—		—		314		314
Unallocated		—		—		245		245

Total	$	175	$	188	$	12,942	$	13,305

Outstanding loan balances:
Commercial & Agriculture	$	88	$	1,983	$	133,391	$	135,462
Commercial Real Estate:
Owner Occupied		—		1,896		159,468		161,364
Non-Owner Occupied		—		359		395,572		395,931
Residential Real Estate		168		1,686		245,454		247,308
Real Estate Construction		—		—		56,293		56,293
Farm Real Estate		—		614		40,556		41,170
Consumer and Other		—		1		17,977		17,978

Total	$	256	$	6,539	$	1,048,711	$	1,055,506


December 31, 2015	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	23	$	1,455	$	1,478
Commercial Real Estate:
Owner Occupied		—		103		2,364		2,467
Non-Owner Occupied		—		—		4,657		4,657
Residential Real Estate		123		137		3,826		4,086
Real Estate Construction		—		—		371		371
Farm Real Estate		—		—		538		538
Consumer and Other		—		—		382		382
Unallocated		—		—		382		382

Total	$	123	$	263	$	13,975	$	14,361

Outstanding loan balances:
Commercial & Agriculture	$	132	$	873	$	123,397	$	124,402
Commercial Real Estate:
Owner Occupied		—		2,141		165,756		167,897
Non-Owner Occupied		—		1,742		346,697		348,439
Residential Real Estate		131		1,642		234,565		236,338
Real Estate Construction		—		—		58,898		58,898
Farm Real Estate		—		953		46,040		46,993
Consumer and Other		—		3		18,557		18,560

Total	$	263	$	7,354	$	993,910	$	1,001,527

The following tables represent credit exposures by internally assigned risk ratings for the periods ended December 31, 2016 and 2015. The remaining loans in the Residential Real Estate, Real Estate Construction and Consumer and Other loan categories that are not assigned a risk grade are presented in a separate table below. 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 rating 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.

•

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


December 31, 2016	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	127,867	$	4,300	$	3,295	$	—	$	135,462
Commercial Real Estate:
Owner Occupied		151,659		4,016		5,689		—		161,364
Non-Owner Occupied		393,592		1,676		663		—		395,931
Residential Real Estate		59,015		1,661		6,911		—		67,587
Real Estate Construction		50,678		16		27		—		50,721
Farm Real Estate		31,814		5,673		3,683		—		41,170
Consumer and Other		2,135		—		109		—		2,244

Total	$	816,760	$	17,342	$	20,377	$	—	$	854,479


December 31, 2015	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	117,739	$	3,090	$	3,573	$	—	$	124,402
Commercial Real Estate:
Owner Occupied		156,622		5,571		5,704		—		167,897
Non-Owner Occupied		339,734		6,100		2,605		—		348,439
Residential Real Estate		62,147		1,671		7,435		—		71,253
Real Estate Construction		52,399		216		29		—		52,644
Farm Real Estate		39,787		4,024		3,182		—		46,993
Consumer and Other		1,987		3		111		—		2,101

Total	$	770,415	$	20,675	$	22,639	$	—	$	813,729

The following tables present performing and nonperforming loans based solely on payment activity for the years ended December 31, 2016 and December 31, 2015 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.


December 31, 2016	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	179,721	$	5,572	$	15,725	$	201,018
Nonperforming		—		—		9		9

Total	$	179,721	$	5,572	$	15,734	$	201,027


December 31, 2015	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	165,048	$	6,254	$	16,458	$	187,760
Nonperforming		37		—		1		38

Total	$	165,085	$	6,254	$	16,459	$	187,798

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2016 and 2015.


December 31, 2016	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	156	$	20	$	152	$	328	$	135,046	$	88	$	135,462	$	—
Commercial Real Estate:
Owner Occupied		722		553		280		1,555		159,809		—		161,364		—
Non-Owner Occupied		147		—		316		463		395,468		—		395,931		—
Residential Real Estate		1,812		507		1,049		3,368		243,772		168		247,308		—
Real Estate Construction		—		—		27		27		56,266		—		56,293		—
Farm Real Estate		93		—		—		93		41,077		—		41,170		—
Consumer and Other		215		31		31		277		17,701		—		17,978		9

Total	$	3,145	$	1,111	$	1,855	$	6,111	$	1,049,139	$	256	$	1,055,506	$	9


December 31, 2015	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	9	$	32	$	37	$	78	$	124,192	$	132	$	124,402	$	—
Commercial Real Estate:
Owner Occupied		982		36		284		1,302		166,595		—		167,897		—
Non-Owner Occupied		269		330		123		722		347,717		—		348,439		—
Residential Real Estate		2,640		404		1,725		4,769		231,438		131		236,338		—
Real Estate Construction		8		—		—		8		58,890		—		58,898		—
Farm Real Estate		—		—		—		—		46,993		—		46,993		—
Consumer and Other		98		68		8		174		18,386		—		18,560		—

Total	$	4,006	$	870	$	2,177	$	7,053	$	994,211	$	263	$	1,001,527	$	—

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of December 31, 2016 and 2015.


	2016		2015
Commercial & Agriculture	$	1,622	$	1,185
Commercial Real Estate:
Owner Occupied		1,461		1,645
Non-Owner Occupied		464		1,428
Residential Real Estate		3,266		3,911
Real Estate Construction		27		29
Farm Real Estate		2		961
Consumer and Other		101		100

Total	$	6,943	$	9,259

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 the borrower 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. The gross interest income that would have been recorded on nonaccrual loans in 2016, 2015 and 2014 if the loans 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, was $701, $1,761 and $1,477, respectively. The amount of interest income on such loans recognized on a cash basis was $1,138 in 2016, $766 in 2015 and $719 in 2014.

Modifications: A modification of a loan constitutes a 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. TDRs accounted for $278 of the allowance for loan losses as of December 31, 2016, $286 as of December 31, 2015 and $895 as of December 31, 2014.

Loan modifications that are considered TDRs completed during the twelve month periods ended December 31, 2016, 2015 and 2014 were as follows:


	For the Twelve Month Period Ended December 31, 2016
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		4	$	529	$	529
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		2		308		308
Real Estate Construction		—		—		—
Farm Real Estate		3		700		700
Consumer and Other		—		—		—

Total Loan Modifications		9	$	1,537	$	1,537


	For the Twelve Month Period Ended December 31, 2015
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		—		—		—
Real Estate Construction		1		41		41
Farm Real Estate		—		—		—
Consumer and Other		—		—		—

Total Loan Modifications		1	$	41	$	41


	For the Twelve Month Period Ended December 31, 2014
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		—		—		—
Residential Real Estate		9		619		554
Real Estate Construction		1		35		35
Farm Real Estate		—		—		—
Consumer and Other		—		—		—

Total Loan Modifications		10	$	654	$	589

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 originations loans, so modified loans present a higher risk of loss than do new origination loans. During the period ended December 31, 2016, there were no defaults on loans that were modified and considered TDRs during the previous twelve months. During the twelve month period ended December 31, 2015, there was one default, totaling $107, on loans which were modified and considered TDRs during the previous twelve months. During the period ended December 31, 2014, there were no defaults on loans that were modified and considered TDRs during the previous twelve months.

Impaired Loans: Larger (greater than $350) commercial loan and commercial real estate loan relationships, all TDRs and residential real estate and consumer loans that are part of a larger relationship are tested for impairment. 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, excluding PCI loans, with the associated allowance amount, if applicable, as of December 31, 2016 and 2015.


	December 31, 2016						December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	1,230	$	1,751			$	851	$	1,034
Commercial Real Estate:
Owner Occupied		1,658		1,803				1,224		1,343
Non-Owner Occupied		359		386				1,742		1,826
Residential Real Estate		1,259		1,590				965		1,591
Farm Real Estate		614		614				953		1,026
Consumer and Other		1		1				3		3

Total		5,121		6,145				5,738		6,823
With an allowance recorded:
Commercial & Agriculture		753		1,303	$	82		22		23	$	23
Commercial Real Estate:
Owner Occupied		238		238		4		917		999		103
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		427		431		102		677		677		137
Farm Real Estate		—		—		—		—		—		—

Total		1,418		1,972		188		1,616		1,699		263
Total:
Commercial & Agriculture		1,983		3,054		82		873		1,057		23
Commercial Real Estate:
Owner Occupied		1,896		2,041		4		2,141		2,342		103
Non-Owner Occupied		359		386		—		1,742		1,826		—
Residential Real Estate		1,686		2,021		102		1,642		2,268		137
Farm Real Estate		614		614		—		953		1,026		—
Consumer and Other		1		1		—		3		3		—

Total	$	6,539	$	8,117	$	188	$	7,354	$	8,522	$	263

The following tables include the average recorded investment and interest income recognized for impaired financing receivables as of, and for the years ended, December 31, 2016, 2015 and 2014.


For the year ended:	December 31, 2016				December 31, 2015
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	2,036	$	40	$	1,519	$	54
Commercial Real Estate:
Owner Occupied		1,847		862		2,738		139
Non-Owner Occupied		1,039		83		1,946		32
Residential Real Estate		1,787		175		2,544		103
Real Estate Construction		—		1		16		—
Farm Real Estate		1,006		95		653		56
Consumer and Other		2		—		4		—

Total	$	7,717	$	1,256	$	9,420	$	384


For the year ended:	December 31, 2014
	Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	3,316	$	104
Commercial Real Estate:
Owner Occupied		5,720		200
Non-Owner Occupied		2,767		40
Residential Real Estate		3,291		207
Real Estate Construction		—		—
Farm Real Estate		219		19
Consumer and Other		6		—

Total	$	15,319	$	570

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 December 31, 2016 and December 31, 2015, a total of $37 and $116, respectively of foreclosed assets were included with other assets. As of December 31, 2016, included within the foreclosed assets is $37 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2016 and December 31, 2015, the Company had initiated formal foreclosure procedures on $710 and $340, respectively of consumer residential mortgages.

Changes in the amortizable yield for PCI loans were as follows, since acquisition:


	At December 31, 2016			At December 31, 2015
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	80		$	—
Acquisition of PCI loans		—			140
Accretion		(31	)		(60	)

Balance at end of period	$	49		$	80

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:


	At December 31, 2016		At December 31, 2015
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	850	$	965
Carrying amount		256		263

There has been $175 and $123 in allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of December 31, 2016 and December 31, 2015, respectively.