Acquisitions, Divestitures and FDIC Indemnification Asset

The Bank is party to a loss sharing agreement with the FDIC as a result of a 2009 acquisition. Under the loss-sharing agreement (“LSA”), the Bank will share in the losses on assets covered under the agreement (referred to as covered assets). On losses up to $29 million, the FDIC has agreed to reimburse the Bank for 80 percent of the losses. On losses exceeding $29 million, the FDIC has agreed to reimburse the Bank for 95 percent of the losses. The loss-sharing agreement is subject to following servicing procedures as specified in the agreement with the FDIC. Loans acquired that are subject to the loss-sharing agreement with the FDIC are referred to as covered loans for disclosure purposes. Since the acquisition date the Bank has been reimbursed $19.4 million for losses and carrying expenses and currently carries an immaterial balance in the indemnification asset. The balance of loans covered by the loss share agreement at June 30, 2017 and December 31, 2016 totaled $4.7 million and $5.1 million, respectively. The only loans still covered by the loss share agreement are the single family loans; however recoveries on non-single family loans are still subject to sharing with the FDIC through July 2, 2017.

FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, applies to a loan with evidence of deterioration of credit quality since origination, acquired by completion of a transfer for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. FASB ASC 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition. The carrying amount of loans accounted for in accordance with FASB ASC 310-30 at June 30, 2017 and 2016 are shown in the following table:



						2017
(Dollar amounts in thousands)	Commercial			Consumer		Total
Beginning balance, April 1,	$	2,009		$	—	$	2,009
Discount accretion
Disposals	(26		)	—		(26		)
ASC 310-30 Loans, June 30,	$	1,983		$	—	$	1,983



							2017
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, January 1,	$	3,451		$	1,430		$	4,881
Discount accretion	—			—			—
Disposals	(1,468		)	(1,430		)	(2,898		)
ASC 310-30 Loans, June 30,	$	1,983		$	—		$	1,983



							2016
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, April 1,	$	4,036		$	1,467		$	5,503
Discount accretion	—			—			—
Disposals	(124		)	(11		)	(135		)
ASC 310-30 Loans, June 30,	$	3,912		$	1,456		$	5,368



							2016
(Dollar amounts in thousands)	Commercial			Consumer			Total
Beginning balance, January 1,	$	4,122		$	1,480		$	5,602

Disposals	(210		)	(24		)	(234		)
ASC 310-30 Loans, June 30,	$	3,912		$	1,456		$	5,368

During the quarter ended March 31, 2016 the Corporation sold a significant portion of the assets and liabilities of the insurance operation for a gain of $13.0 million . The total assets, total revenues and net income of the insurance operation for 2015 were $13.0 million, $7.6 million and $168 thousand, respectively. For 2014 they were $15.8 million, $8.3 million and $554 thousand, respectively. The Corporation has chosen to focus its resources on the core banking activities.