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. 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:

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 $25,028 adequate to cover loan losses inherent in the loan portfolio, at December 31, 2020. 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, 2020, 2019 and 2018. The changes can be impacted by overall loan volume, adversely graded loans, historical charge-offs and economic factors.

December 31, 2020	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,219	$	( 20	)	$	7	$	604		$	2,810
Commercial Real Estate:
Owner Occupied		2,541		( 148	)		259		1,405			4,057
Non-Owner Occupied		6,584		—			48		5,819			12,451
Residential Real Estate		1,582		( 236	)		218		920			2,484
Real Estate Construction		1,250		—			4		1,185			2,439
Farm Real Estate		344		—			13		( 19	)		338
Consumer and Other		247		( 61	)		65		( 42	)		209
Unallocated		—		—			—		240			240
Total	$	14,767	$	( 465	)	$	614	$	10,112		$	25,028

For the year ended December 31, 2020, the Company provided $10,112 to the allowance for loan losses. The provision was primarily the result of an increase in Civista’s qualitative factors, primarily changes in international, national, regional and local conditions, related to the economic shutdown driven by the ongoing COVID-19 pandemic. Economic impacts related to the COVID-19 pandemic include the loss of revenue being experienced by our business clients, disruption of supply chains, additional employee costs for businesses due to the pandemic, higher unemployment rates throughout our footprint and a large number of customers requesting payment relief. The allowance for Commercial & Agriculture loans increased due to an increase in general reserves required for this type as a result of an increase in loan balances mainly from Civista’s participation in the PPP loan program and by an increase in loss rates, resulting in an increase in the provision. PPP loans are eligible for a 100% guaranty by the U.S. Small Business Administration (“SBA”). However, in the event of a loss resulting from a default on a PPP loan, and a determination by the SBA that there was a deficiency in the manner on which the PPP loan was originated or funded, the SBA may deny its liability under the guaranty. The reserve percentage for PPP loans is substantially less than the other loans in this segment. The allowance for Commercial Real Estate – Owner Occupied loans increased due to an increase in general reserves required for this type as a result of higher loan balances, an increase in classified, the volume of loans currently in payment deferral, and an increase in loss rates. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Non-Owner Occupied loans increased due to an increase in general reserves required as a result of an increase in loan balances, an increase in classified loans, the volume of loans currently in payment deferral, and an increase in loss rates. This was represented as an increase in the provision. The allowance for Residential Real Estate loans increased due to an increase in general reserves required for this type as a result of factors related to the COVID-19 pandemic, offset by a decrease in loan balances, represented by an increase in the provision. The allowance for Real Estate Construction loans increased due to an increase in general reserves required as a result of an increase in loan balances and an increase in loss rates, represented by an increase in the provision. The allowance for Farm Real Estate loans decreased due to a decrease in general reserves required as a result of a decrease in loan balances. The result was represented as a decrease in the provision. The allowance for Consumer and Other loans decreased due to a decrease in general reserves required as a result of a decrease in loan balances and loss rates. The result 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 uncertainty in the portfolio at December 31, 2020.

December 31, 2019	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,747	$	( 114	)	$	86	$	500		$	2,219
Commercial Real Estate:
Owner Occupied		1,962		( 161	)		289		451			2,541
Non-Owner Occupied		5,803		—			102		679			6,584
Residential Real Estate		1,531		( 294	)		259		86			1,582
Real Estate Construction		1,046		( 24	)		3		225			1,250
Farm Real Estate		397		—			5		( 58	)		344
Consumer and Other		284		( 183	)		85		61			247
Unallocated		909		—			—		( 909	)		—
Total	$	13,679	$	( 776	)	$	829	$	1,035		$	14,767

For the year ended December 31, 2019, the allowance for Commercial & Agriculture loans increased as a result of an increase in general reserves due to higher loan balances. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied loans increased as a result of an increase in general reserves due to higher loan balances. The result was represented as an increase 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. The allowance for Residential Real Estate loans increased as a result of an increase in general reserves required for this type as a result of an increase in outstanding loan balances, represented by an increase in the provision. The allowance for Real Estate Construction loans increased due to higher outstanding loan balances for this type of loan. 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 was represented as a decrease in the provision.

December 31, 2018	Beginning balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	1,562	$	( 249	)	$	169	$	265		$	1,747
Commercial Real Estate:
Owner Occupied		2,043		( 193	)		158		( 46	)		1,962
Non-Owner Occupied		5,307		( 153	)		28		621			5,803
Residential Real Estate		1,910		( 105	)		208		( 482	)		1,531
Real Estate Construction		834		—			—		212			1,046
Farm Real Estate		430		—			5		( 38	)		397
Consumer and Other		290		( 203	)		100		97			284
Unallocated		758		—			—		151			909
Total	$	13,134	$	( 903	)	$	668	$	780		$	13,679

For the year ended December 31, 2018, the allowance for Commercial & Agriculture loans increased as a result of an increase in general reserves due to 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. 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. 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 was represented as a decrease in the provision.

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of December 31, 2020 and December 31, 2019.

December 31, 2020	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	73	$	2,737	$	2,810
Commercial Real Estate:
Owner Occupied		—		5		4,052		4,057
Non-Owner Occupied		—		—		12,451		12,451
Residential Real Estate		—		29		2,455		2,484
Real Estate Construction		—		—		2,439		2,439
Farm Real Estate		—		—		338		338
Consumer and Other		—		—		209		209
Unallocated		—		—		240		240
Total	$	—	$	107	$	24,921	$	25,028

Outstanding loan balances:
Commercial & Agriculture	$	—	$	74	$	409,802	$	409,876
Commercial Real Estate:
Owner Occupied		—		980		277,433		278,413
Non-Owner Occupied		—		48		705,024		705,072
Residential Real Estate		388		946		441,254		442,588
Real Estate Construction		—		—		175,609		175,609
Farm Real Estate		—		618		32,484		33,102
Consumer and Other		—		—		12,842		12,842
Total	$	388	$	2,666	$	2,054,448	$	2,057,502

December 31, 2019	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	—	$	2,219	$	2,219
Commercial Real Estate:
Owner Occupied		—		9		2,532		2,541
Non-Owner Occupied		—		—		6,584		6,584
Residential Real Estate		—		82		1,500		1,582
Real Estate Construction		—		—		1,250		1,250
Farm Real Estate		—		—		344		344
Consumer and Other		—		—		247		247
Unallocated		—		—		—		—
Total	$	—	$	91	$	14,676	$	14,767

Outstanding loan balances:
Commercial & Agriculture	$	—	$	367	$	202,743	$	203,110
Commercial Real Estate:
Owner Occupied		—		426		245,180		245,606
Non-Owner Occupied		—		374		591,848		592,222
Residential Real Estate		467		1,764		460,801		463,032
Real Estate Construction		—		—		155,825		155,825
Farm Real Estate		—		666		33,448		34,114
Consumer and Other		—		—		15,061		15,061
Total	$	467	$	3,597	$	1,704,906	$	1,708,970

The following tables represent credit exposures by internally assigned risk ratings for the periods ended December 31, 2020 and 2019. 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.

December 31, 2020	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	401,636	$	4,472	$	3,768	$	—	$	409,876
Commercial Real Estate:
Owner Occupied		248,316		19,429		10,668		—		278,413
Non-Owner Occupied		604,909		58,270		41,893		—		705,072
Residential Real Estate		81,409		668		5,524		—		87,601
Real Estate Construction		158,207		962		492		—		159,661
Farm Real Estate		30,486		216		2,400		—		33,102
Consumer and Other		833		—		33		—		866
Total	$	1,525,796	$	84,017	$	64,778	$	—	$	1,674,591

December 31, 2019	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	199,649	$	2,236	$	1,225	$	—	$	203,110
Commercial Real Estate:
Owner Occupied		237,171		5,617		2,818		—		245,606
Non-Owner Occupied		588,633		2,155		1,434		—		592,222
Residential Real Estate		73,289		528		6,495		—		80,312
Real Estate Construction		145,251		—		9		—		145,260
Farm Real Estate		30,808		567		2,739		—		34,114
Consumer and Other		1,289		—		6		—		1,295
Total	$	1,276,090	$	11,103	$	14,726	$	—	$	1,301,919

Due to the business disruptions and shut-downs due to the Covid-19 pandemic, management offered payment deferments to a number of customers that had previously been current in all respects. The bank instituted an enhanced portfolio management process which included meeting with customers, requesting additional financial information and evaluating cashflow and adjusting risk ratings as conditions warrant. During this process systematically downgraded a significant number of loans to recognize the increased risk attributed to the business disruptions related to the pandemic. The majority of the loans downgraded did not meet the definition of impaired, but were added to the criticized category due to the additional deferrals or reduced financial performance. Additionally, the bank did offer longer term deferrals under Section 4013 of the Cares Act, that were also downgraded as appropriate. The majority of the deferrals made during the year resulted in continued payments of interest. The Bank believes it has prudently identified risk, assigned appropriate risk ratings, and has a comprehensive portfolio monitoring process to identify and quantify risk.

The following tables present performing and nonperforming loans based solely on payment activity for the years ended December 31, 2020 and December 31, 2019 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.

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2020 and 2019.

December 31, 2020	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	$	117	$	25	$	50	$	192	$	409,684	$	—	$	409,876	$	—
Commercial Real Estate:
Owner Occupied		—		4		102		106		278,307		—		278,413		—
Non-Owner Occupied		—		—		6		6		705,066		—		705,072		—
Residential Real Estate		1,059		867		1,314		3,240		438,960		388		442,588		—
Real Estate Construction		—		—		—		—		175,609		—		175,609		—
Farm Real Estate		—		—		4		4		33,098		—		33,102		—
Consumer and Other		59		1		16		76		12,766		—		12,842		—
Total	$	1,235	$	897	$	1,492	$	3,624	$	2,053,490	$	388	$	2,057,502	$	—

December 31, 2019	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	$	27	$	35	$	106	$	168	$	202,942	$	—	$	203,110	$	—
Commercial Real Estate:
Owner Occupied		453		63		663		1,179		244,427		—		245,606		—
Non-Owner Occupied		—		—		8		8		592,214		—		592,222		—
Residential Real Estate		2,399		198		1,775		4,372		458,193		467		463,032		—
Real Estate Construction		—		—		—		—		155,825		—		155,825		—
Farm Real Estate		—		—		7		7		34,107		—		34,114		—
Consumer and Other		129		46		—		175		14,886		—		15,061		—
Total	$	3,008	$	342	$	2,559	$	5,909	$	1,702,594	$	467	$	1,708,970	$	—

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of December 31, 2020 and 2019.

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 2020, 2019 and 2018 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 $536, $571 and $587, respectively. The amount of interest income on such loans recognized on a cash basis was $477 in 2020, $379 in 2019 and $360 in 2018.

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 $35 of the allowance for loan losses as of December 31, 2020, $91 as of December 31, 2019 and $141 as of December 31, 2018.

There were no loans modified during the twelve month period ended December 31, 2020. Loan modifications that are considered TDRs completed during the twelve month periods ended December 31, 2019 and 2018 were as follows:

	For the Twelve Month Period Ended December 31, 2019
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		—	$	—	$	—
Commercial Real Estate:
Owner Occupied		—		—		—
Non-Owner Occupied		1		382		382
Residential Real Estate		—		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		1	$	382	$	382

	For the Twelve Month Period Ended December 31, 2018
	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		1		23		23
Real Estate Construction		—		—		—
Farm Real Estate		1		110		110
Consumer and Other		—		—		—
Total Loan Modifications		2	$	133	$	133

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 periods ended December 31, 2020, 2019 and 2018, 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, commercial real estate loan and farm 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.

During 2020, Civista modified 813 loans totaling $431,283, primarily consisting of the deferral of principal and/or interest payments. All of the loans modified were performing at December 31, 2019 and comply with the provisions of the Coronavirus Aid Relief, and Economic Security Act (“CARES Act”) to not be considered a troubled debt restructuring.

While most of the loans that received some form of modification have returned to making payments, Civista has received customer deferral requests for another round of modifications on loans. As of December 31, 2020, Civista has 55 loans totaling $73,786 that remain on a CARES Act modification. Details with respect to loan modifications that remain on deferred status are as follows:

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 December 31, 2020 and 2019.

	December 31, 2020						December 31, 2019
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	—	$	—			$	367	$	367
Commercial Real Estate:
Owner Occupied		757		757				168		168
Non-Owner Occupied		48		48				374		374
Residential Real Estate		915		940				1,571		1,643
Farm Real Estate		618		618				666		666
Total		2,338		2,363				3,146		3,218
With an allowance recorded:
Commercial & Agriculture		74		74	$	73		—		—	$	—
Commercial Real Estate:
Owner Occupied		223		223		5		258		258		9
Residential Real Estate		31		35		29		193		197		82
Farm Real Estate		—		—		—		—		—		—
Total		328		332		107		451		455		91
Total:
Commercial & Agriculture		74		74		73		367		367		—
Commercial Real Estate:
Owner Occupied		980		980		5		426		426		9
Non-Owner Occupied		48		48		—		374		374		—
Residential Real Estate		946		975		29		1,764		1,840		82
Farm Real Estate		618		618		—		666		666		—
Total	$	2,666	$	2,695	$	107	$	3,597	$	3,673	$	91

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, 2020, 2019 and 2018.

For the year ended:	December 31, 2020				December 31, 2019
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	88	$	4	$	367	$	33
Commercial Real Estate:
Owner Occupied		520		27		456		32
Non-Owner Occupied		243		16		308		20
Residential Real Estate		1,361		43		1,271		58
Farm Real Estate		647		26		683		29
Total	$	2,859	$	116	$	3,085	$	172

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, 2020 there were $31 of foreclosed assets included in other assets. As of December 31, 2019 there were no foreclosed assets included in other assets. As of December 31, 2020 and 2019, the Company had initiated formal foreclosure procedures on $741 and $1,022, respectively, of consumer residential mortgages.

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

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

There was no allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of December 31, 2020 and 2019, respectively.