(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 and lease losses, the Company has segmented certain loans in the portfolio by product type. 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. 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 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 $13,047 adequate to cover loan losses inherent in the loan portfolio, at June 30, 2017. The following tables present, by portfolio segment, the changes in the allowance for loan losses for the three and six months ended June 30, 2017 and 2016.

Allowance for loan losses:

For the six months ended June 30, 2017


June 30, 2017	Beginning balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	2,018	$	(1	)	$	83	$	(492	)	$	1,608
Commercial Real Estate:
Owner Occupied		2,171		(210	)		18		31			2,010
Non-Owner Occupied		4,606		—			9		124			4,739
Residential Real Estate		3,089		(196	)		87		(304	)		2,676
Real Estate Construction		420		—			19		43			482
Farm Real Estate		442		—			—		(17	)		425
Consumer and Other		314		(81	)		14		77			324
Unallocated		245		—			—		538			783

Total	$	13,305	$	(488	)	$	230	$	—		$	13,047

For the six months ended June 30, 2017, the allowance for Commercial & Agriculture loans was reduced by a decrease in general reserves as a result of lower loss rates, offset by an increase in the specific reserves required for this type. The result of these changes was represented as a decrease in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced by a decrease in general reserves as a result of lower loss rates. The allowance for Commercial Real Estate – Non-Owner Occupied loans increased due to an increase in general reserves required for this type as a result of higher loan balances, offset by lower loss rates. 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 higher outstanding loan balances for this type of loan and recoveries. 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. The result of these changes was represented as a decrease in the provision. The allowance for Consumer and Other loans was increased by an increase in general reserves required for this type as a result of higher loss rates. 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:

For the six months ended June 30, 2016


	Beginning balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,478	$	(42	)	$	35	$	86		$	1,557
Commercial Real Estate:
Owner Occupied		2,467		(42	)		52		(84	)		2,393
Non-Owner Occupied		4,657		—			1,359		(1,047	)		4,969
Residential Real Estate		4,086		(225	)		361		(323	)		3,899
Real Estate Construction		371		—			2		(7	)		366
Farm Real Estate		538		—			—		(62	)		476
Consumer and Other		382		(47	)		33		(10	)		358
Unallocated		382		—			—		147			529

Total	$	14,361	$	(356	)	$	1,842	$	(1,300	)	$	14,547

For the six months ended June 30, 2016, the increase in the 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 decreases in past due, classified and non-accrual loans for this type. The result of these changes was represented as a decrease in the provision. The increase in the allowance for Commercial Real Estate – Non-Owner Occupied loans was the result of an increase in general reserves required as a result of higher balances. Offsetting this was a payoff on a previously charged down loan that was received during the period 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 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:

For the three months ended June 30, 2017


	Beginning balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,569	$	—		$	27	$	12		$	1,608
Commercial Real Estate:
Owner Occupied		2,259		(210	)		16		(55	)		2,010
Non-Owner Occupied		4,543		—			4		192			4,739
Residential Real Estate		3,022		(107	)		32		(271	)		2,676
Real Estate Construction		413		—			14		55			482
Farm Real Estate		407		—			—		18			425
Consumer and Other		354		(40	)		11		(1	)		324
Unallocated		733		—			—		50			783

Total	$	13,300	$	(357	)	$	104	$	—		$	13,047

For the three months ended June 30, 2017, the increase in the allowance for Commercial & Agriculture loans was due to an increase in general reserves as a result of higher loan balances. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied loans was reduced by a decrease in general reserves as a result of lower loss rates. The result was represented as a decrease in the provision. The allowance for Commercial Real Estate – Non-Owner Occupied loans increased due to an increase in general reserves required for this type as a result of higher loan balances, offset by lower loss rates. 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 higher outstanding loan balances for this type of loan and recoveries. The allowance for Farm Real Estate loans increased due to higher outstanding loan balances for this type of loan. 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:

For the three months ended June 30, 2016


	Beginning balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,446	$	(20	)	$	30	$	101		$	1,557
Commercial Real Estate:
Owner Occupied		2,372		(42	)		3		60			2,393
Non-Owner Occupied		4,711		—			1,319		(1,061	)		4,969
Residential Real Estate		4,114		(129	)		272		(358	)		3,899
Real Estate Construction		408		—			1		(43	)		366
Farm Real Estate		496		—			—		(20	)		476
Consumer and Other		358		(39	)		19		20			358
Unallocated		528		—			—		1			529

Total	$	14,433	$	(230	)	$	1,644	$	(1,300	)	$	14,547

For the three months ended June 30, 2016, the increase in the allowance for Commercial & Agriculture loans was due to an increase in general reserves as a result of higher loss rates in criticized loans. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Non-Owner Occupied loans increased as the result of an increase in general reserves required as a result of higher balances. Offsetting this was a payoff on a previously charged down loan that was received during the period 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 was reduced by a decrease in general reserves required for this type as result of decreased loan balances, represented by a decrease 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, 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.

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of June 30, 2017 and December 31, 2016.


June 30, 2017	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	82	$	235	$	1,291	$	1,608
Commercial Real Estate:
Owner Occupied		—		4		2,006		2,010
Non-Owner Occupied		—		—		4,739		4,739
Residential Real Estate		73		103		2,500		2,676
Real Estate Construction		—		—		482		482
Farm Real Estate		—		6		419		425
Consumer and Other		—		—		324		324
Unallocated		—		—		783		783

Total	$	155	$	348	$	12,544	$	13,047

Outstanding loan balances:
Commercial & Agriculture	$	87	$	1,562	$	142,059	$	143,708
Commercial Real Estate:
Owner Occupied		—		1,715		170,547		172,262
Non-Owner Occupied		—		355		405,521		405,876
Residential Real Estate		151		1,487		256,942		258,580
Real Estate Construction		—		—		63,538		63,538
Farm Real Estate		—		614		38,455		39,069
Consumer and Other		—		—		17,784		17,784

Total	$	238	$	5,733	$	1,094,846	$	1,100,817


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

The following tables present credit exposures by internally assigned grades for the periods ended June 30, 2017 and December 31, 2016. 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 and Other loans are not risk-graded, except when collateral is used for a business purpose.


June 30, 2017	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	136,174	$	5,245	$	2,289	$	—	$	143,708
Commercial Real Estate:
Owner Occupied		160,769		6,233		5,260		—		172,262
Non-Owner Occupied		403,157		1,916		803		—		405,876
Residential Real Estate		61,022		2,098		6,255		—		69,375
Real Estate Construction		58,340		15		27		—		58,382
Farm Real Estate		30,753		6,311		2,005		—		39,069
Consumer and Other		1,794		—		75		—		1,869

Total	$	852,009	$	21,818	$	16,714	$	—	$	890,541


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

The following tables present performing and nonperforming loans based solely on payment activity for the periods ended June 30, 2017 and December 31, 2016 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
June 30, 2017
Performing	$	189,205	$	5,156	$	15,871	$	210,232
Nonperforming		—		—		44		44

Total	$	189,205	$	5,156	$	15,915	$	210,276


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

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

Civista Bancshares, Inc.

Notes to Interim Consolidated Financial Statements (Unaudited)

Form 10-Q

(Amounts in thousands, except share data)

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of June 30, 2017 and December 31, 2016.


June 30, 2017	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	$	249	$	—	$	10	$	259	$	143,362	$	87	$	143,708	$	—
Commercial Real Estate:
Owner Occupied		334		640		614		1,588		170,674		—		172,262		—
Non-Owner Occupied		—		—		600		600		405,276		—		405,876		—
Residential Real Estate		263		198		979		1,440		256,989		151		258,580		—
Real Estate Construction		—		—		27		27		63,511		—		63,538		—
Farm Real Estate		504		—		—		504		38,565		—		39,069		—
Consumer and Other		150		11		44		205		17,579		—		17,784		44

Total	$	1,500	$	849	$	2,274	$	4,623	$	1,095,956	$	238	$	1,100,817	$	44


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

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of June 30, 2017 and December 31, 2016.


	June 30, 2017		December 31, 2016
Commercial & Agriculture	$	1,342	$	1,622
Commercial Real Estate:
Owner Occupied		1,715		1,461
Non-Owner Occupied		611		464
Residential Real Estate		2,987		3,266
Real Estate Construction		27		27
Farm Real Estate		—		2
Consumer and Other		70		101

Total	$	6,752	$	6,943

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. Payments received on nonaccrual loans are applied to the unpaid principal balance. 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 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 June 30, 2017, TDRs accounted for $421 of the allowance for loan losses. As of December 31, 2016, TDRs accounted for $278 of the allowance for loan losses.

Loan modifications that are considered TDRs completed during the periods ended June 30, 2017 and June 30, 2016 were as follows:


	For the Six-Month Period Ended
	June 30, 2017
	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		1		13		13
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—

Total Loan Modifications		1	$	13	$	13


	For the Six-Month Period Ended
	June 30, 2016
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		4	$	529	$	529
Commercial Real Estate—Owner Occupied		—		—		—
Commercial Real Estate—Non-Owner Occupied		—		—		—
Residential Real Estate		2		308		308
Real Estate Construction		—		—		—
Farm Real Estate		2		614		614
Consumer and Other		—		—		—

Total Loan Modifications		8	$	1,451	$	1,451


	For the Three-Month Period Ended
	June 30, 2017
	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		1		13		13
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—

Total Loan Modifications		1	$	13	$	13


	For the Three-Month Period Ended
	June 30, 2016
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		1	$	47	$	47
Commercial Real Estate—Owner Occupied		—		—		—
Commercial Real Estate—Non-Owner Occupied		—		—		—
Residential Real Estate		1		76		76
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—

Total Loan Modifications		2	$	123	$	123

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 six-month periods ended June 30, 2017 and June 30, 2016, there were no defaults on loans that were modified and considered TDRs during the respective twelve previous months.

Impaired Loans: Larger (greater than $350) Commercial & Agricultural 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 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 table includes the recorded investment and unpaid principal balances for impaired financing receivables, excluding PCI loans, with the associated allowance amount, if applicable, as of June 30, 2017 and December 31, 2016.


	June 30, 2017						December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	375	$	376			$	1,230	$	1,751
Commercial Real Estate:
Owner Occupied		1,485		1,650				1,658		1,803
Non-Owner Occupied		355		381				359		386
Residential Real Estate		1,105		1,177				1,259		1,590
Farm Real Estate		150		150				614		614
Consumer and Other		—		—				1		1

Total		3,470		3,734				5,121		6,145
With an allowance recorded:
Commercial & Agriculture		1,187		1,737	$	235		753		1,303	$	82
Commercial Real Estate:
Owner Occupied		230		230		4		238		238		4
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		382		386		103		427		431		102
Farm Real Estate		464		464		6		—		—		—

Total		2,263		2,817		348		1,418		1,972		188
Total:
Commercial & Agriculture		1,562		2,113		235		1,983		3,054		82
Commercial Real Estate:
Owner Occupied		1,715		1,880		4		1,896		2,041		4
Non-Owner Occupied		355		381		—		359		386		—
Residential Real Estate		1,487		1,563		103		1,686		2,021		102
Farm Real Estate		614		614		6		614		614		—
Consumer and Other		—		—		—		1		1		—

Total	$	5,733	$	6,551	$	348	$	6,539	$	8,117	$	188

The following table includes the average recorded investment and interest income recognized for impaired financing receivables for the three- and six-month periods ended June 30, 2017 and 2016.


For the six months ended:	June 30, 2017				June 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,756	$	20	$	1,937	$	11
Commercial Real Estate—Owner Occupied		1,829		48		1,800		45
Commercial Real Estate—Non-Owner Occupied		357		3		1,489		857
Residential Real Estate		1,610		39		1,799		39
Real Estate Construction		—		—		—		—
Farm Real Estate		614		13		1,250		10
Consumer and Other		—		—		3		—

Total	$	6,166	$	123	$	8,278	$	962


For the three months ended:	June 30, 2017				June 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	1,643	$	6	$	2,469	$	8
Commercial Real Estate—Owner Occupied		1,795		26		1,630		20
Commercial Real Estate—Non-Owner Occupied		356		2		1,363		853
Residential Real Estate		1,572		19		1,878		20
Real Estate Construction		—		—		—		—
Farm Real Estate		614		7		1,398		6
Consumer and Other		—		—		2		—

Total	$	5,980	$	60	$	8,740	$	907

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


	For the Six-Month Period Ended June 30, 2017			For the Six-Month Period Ended June 30, 2016
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	49		$	82
Acquisition of PCI loans		—			—
Accretion		(18	)		(16	)

Balance at end of period	$	31		$	66


	For the Three-Month Period Ended June 30, 2017			For the Three-Month Period Ended June 30, 2016
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	40		$	74
Acquisition of PCI loans		—			—
Accretion		(9	)		(8	)

Balance at end of period	$	31		$	66

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


	At June 30, 2017		At December 31, 2016
	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	$	814	$	850
Carrying amount		238		256

There has been $155 and $175 in allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of June 30, 2017 and December 31, 2016, respectively.

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 June 30, 2017 and December 31, 2016, a total of $27 and $37, respectively of foreclosed assets were included with other assets. As of June 30, 2017, included within the foreclosed assets is $27 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of June 30, 2017 and December 31, 2016, the Company had initiated formal foreclosure procedures on $328 and $710, respectively, of consumer residential mortgages.