(5) Allowance for Loan Losses

Management has an established methodology for determining 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 $12,867 adequate to cover loan losses inherent in the loan portfolio, at June 30, 2018. The following tables present, by portfolio segment, the changes in the allowance for loan losses for the three and six months ended June 30, 2018 and 2017.

Allowance for loan losses:

For the six months ended June 30, 2018	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,562	$	(248	)	$	104	$	212		$	1,630
Commercial Real Estate:
Owner Occupied		2,043		(193	)		130		181			2,161
Non-Owner Occupied		5,307		(45	)		21		(148	)		5,135
Residential Real Estate		1,910		(62	)		93		(250	)		1,691
Real Estate Construction		834		—			—		27			861
Farm Real Estate		430		—			3		(23	)		410
Consumer and Other		290		(103	)		33		80			300
Unallocated		758		—			—		(79	)		679
Total	$	13,134	$	(651	)	$	384	$	—		$	12,867

For the six months ended June 30, 2018, the allowance for Commercial & Agriculture loans increased due to an increase in general reserves required for this type 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 increased due to an increase in general reserves required for this type as a result of higher loan balances. The allowance for Commercial Real Estate – Non-Owner Occupied loans was reduced by a decrease in general reserves required for this type as a result of 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 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. 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, 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 three months ended June 30, 2018	Beginning balance		Charge-offs			Recoveries		Provision			Ending Balance
Commercial & Agriculture	$	1,359	$	(123	)	$	85	$	309		$	1,630
Commercial Real Estate:
Owner Occupied		2,030		—			121		10			2,161
Non-Owner Occupied		5,670		(1	)		7		(541	)		5,135
Residential Real Estate		1,750		(40	)		35		(54	)		1,691
Real Estate Construction		820		—			—		41			861
Farm Real Estate		411		—			2		(3	)		410
Consumer and Other		247		(62	)		29		86			300
Unallocated		527		—			—		152			679
Total	$	12,814	$	(226	)	$	279	$	—		$	12,867

For the three months ended June 30, 2018, the allowance for Commercial & Agriculture loans increased due to an increase in general reserves required for this type 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 increased due to an increase in general reserves required for this type as a result of higher loan balances. The allowance for Commercial Real Estate – Non-Owner Occupied loans was reduced by a decrease in general reserves required for this type as a result of 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 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. 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.

The following tables present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of June 30, 2018 and December 31, 2017.

June 30, 2018	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	—	$	5	$	1,625	$	1,630
Commercial Real Estate:
Owner Occupied		—		8		2,153		2,161
Non-Owner Occupied		—		—		5,135		5,135
Residential Real Estate		29		100		1,562		1,691
Real Estate Construction		—		—		861		861
Farm Real Estate		—		6		404		410
Consumer and Other		—		—		300		300
Unallocated		—		—		679		679
Total	$	29	$	119	$	12,719	$	12,867
Outstanding loan balances:
Commercial & Agriculture	$	61	$	961	$	152,720	$	153,742
Commercial Real Estate:
Owner Occupied		—		517		169,228		169,745
Non-Owner Occupied		—		39		431,056		431,095
Residential Real Estate		108		1,307		269,792		271,207
Real Estate Construction		—		—		100,812		100,812
Farm Real Estate		—		778		37,067		37,845
Consumer and Other		—		—		15,586		15,586
Total	$	169	$	3,602	$	1,176,261	$	1,180,032

December 31, 2017	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	82	$	4	$	1,476	$	1,562
Commercial Real Estate:
Owner Occupied		—		6		2,037		2,043
Non-Owner Occupied		—		—		5,307		5,307
Residential Real Estate		44		109		1,757		1,910
Real Estate Construction		—		—		834		834
Farm Real Estate		—		6		424		430
Consumer and Other		—		—		290		290
Unallocated		—		—		758		758
Total	$	126	$	125	$	12,883	$	13,134
Outstanding loan balances:
Commercial & Agriculture	$	87	$	438	$	151,948	$	152,473
Commercial Real Estate:
Owner Occupied		—		1,010		163,089		164,099
Non-Owner Occupied		—		44		425,579		425,623
Residential Real Estate		128		1,360		267,247		268,735
Real Estate Construction		—		—		97,531		97,531
Farm Real Estate		—		608		38,853		39,461
Consumer and Other		—		—		16,739		16,739
Total	$	215	$	3,460	$	1,160,986	$	1,164,661

The following tables present credit exposures by internally assigned grades as of June 30, 2018 and December 31, 2017. 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, 2018	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	148,387	$	2,297	$	3,058	$	—	$	153,742
Commercial Real Estate:
Owner Occupied		163,160		1,256		5,329		—		169,745
Non-Owner Occupied		428,084		2,288		723		—		431,095
Residential Real Estate		60,275		1,831		5,091		—		67,197
Real Estate Construction		91,406		14		1,289		—		92,709
Farm Real Estate		29,816		5,079		2,950		—		37,845
Consumer and Other		1,272		—		14		—		1,286
Total	$	922,400	$	12,765	$	18,454	$	—	$	953,619

December 31, 2017	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	140,842	$	8,412	$	3,219	$	—	$	152,473
Commercial Real Estate:
Owner Occupied		155,756		1,166		7,177		—		164,099
Non-Owner Occupied		422,363		2,321		939		—		425,623
Residential Real Estate		62,628		1,997		5,873		—		70,498
Real Estate Construction		91,545		15		27		—		91,587
Farm Real Estate		25,228		11,236		2,997		—		39,461
Consumer and Other		1,312		—		70		—		1,382
Total	$	899,674	$	25,147	$	20,302	$	—	$	945,123

The following tables present performing and nonperforming loans based solely on payment activity for the periods ended June 30, 2018 and December 31, 2017 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.

June 30, 2018	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	204,010	$	8,103	$	14,266	$	226,379
Nonperforming		—		—		34		34
Total	$	204,010	$	8,103	$	14,300	$	226,413

December 31, 2017	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	198,237	$	5,944	$	15,341	$	219,522
Nonperforming		—		—		16		16
Total	$	198,237	$	5,944	$	15,357	$	219,538

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of June 30, 2018 and December 31, 2017.

June 30, 2018	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	$	186	$	—	$	663	$	849	$	152,832	$	61	$	153,742	$	—
Commercial Real Estate:
Owner Occupied		176		195		452		823		168,922		—		169,745		—
Non-Owner Occupied		—		—		155		155		430,940		—		431,095		—
Residential Real Estate		440		307		533		1,280		269,819		108		271,207		—
Real Estate Construction		—		—		27		27		100,785		—		100,812		—
Farm Real Estate		149		78		181		408		37,437		—		37,845		—
Consumer and Other		123		22		39		184		15,402		—		15,586		34
Total	$	1,074	$	602	$	2,050	$	3,726	$	1,176,137	$	169	$	1,180,032	$	34

December 31, 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	$	575	$	2	$	685	$	1,262	$	151,124	$	87	$	152,473	$	—
Commercial Real Estate:
Owner Occupied		897		104		484		1,485		162,614		—		164,099		—
Non-Owner Occupied		133		—		470		603		425,020		—		425,623		—
Residential Real Estate		1,613		229		785		2,627		265,980		128		268,735		—
Real Estate Construction		—		—		27		27		97,504		—		97,531		—
Farm Real Estate		27		—		186		213		39,248		—		39,461		—
Consumer and Other		92		96		16		204		16,535		—		16,739		16
Total	$	3,337	$	431	$	2,653	$	6,421	$	1,158,025	$	215	$	1,164,661	$	16

The following table presents loans on nonaccrual status, excluding purchased credit-impaired (PCI) loans, as of June 30, 2018 and December 31, 2017.

	June 30, 2018		December 31, 2017
Commercial & Agriculture	$	856	$	887
Commercial Real Estate:
Owner Occupied		810		1,476
Non-Owner Occupied		252		711
Residential Real Estate		2,261		2,778
Real Estate Construction		27		27
Farm Real Estate		181		186
Consumer and Other		11		67
Total	$	4,398	$	6,132

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. Residential Real Estate loans modified in a TDR primarily involve interest rate reductions where monthly payments are 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 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, 2018, TDRs accounted for $148 of the allowance for loan losses. As of December 31, 2017, TDRs accounted for $169 of the allowance for loan losses.

Loan modifications that are considered TDRs completed during the periods ended June 30, 2018 and June 30, 2017 were as follows:

	For the Six-Month Period Ended
	June 30, 2018
	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial & Agriculture		3	$	591	$	591
Commercial Real Estate—Owner Occupied		—		—		—
Commercial Real Estate—Non-Owner Occupied		—		—		—
Residential Real Estate		—		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Consumer and Other		—		—		—
Total Loan Modifications		3	$	591	$	591

	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 three months ended

June 30, 2018

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

—

Real Estate Construction

—

Farm Real Estate

—

Consumer and Other

—

Total Loan Modifications

—

	For the three months 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

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, 2018 and June 30, 2017, 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, 2018 and December 31, 2017.

	June 30, 2018						December 31, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial & Agriculture	$	571	$	571			$	—	$	—
Commercial Real Estate:
Owner Occupied		207		207				693		913
Non-Owner Occupied		39		43				44		48
Residential Real Estate		937		1,009				977		1,049
Farm Real Estate		328		328				148		148
Consumer and Other		—		—				—		—
Total		2,082		2,158				1,862		2,158
With an allowance recorded:
Commercial & Agriculture		390		390	$	5		438		438	$	4
Commercial Real Estate:
Owner Occupied		310		310		8		317		317		6
Non-Owner Occupied		—		—		—		—		—		—
Residential Real Estate		370		374		100		383		387		109
Farm Real Estate		450		450		6		460		460		6
Total		1,520		1,524		119		1,598		1,602		125
Total:
Commercial & Agriculture		961		961		5		438		438		4
Commercial Real Estate:
Owner Occupied		517		517		8		1,010		1,230		6
Non-Owner Occupied		39		43		—		44		48		—
Residential Real Estate		1,307		1,383		100		1,360		1,436		109
Farm Real Estate		778		778		6		608		608		6
Consumer and Other		—		—		—		—		—		—
Total	$	3,602	$	3,682	$	119	$	3,460	$	3,760	$	125

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, 2018 and 2017.

	June 30, 2018				June 30, 2017
For the six months ended	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	808	$	13	$	1,756	$	20
Commercial Real Estate—Owner Occupied		686		17		1,829		48
Commercial Real Estate—Non-Owner Occupied		42		3		357		3
Residential Real Estate		1,334		34		1,610		39
Real Estate Construction		—		—		—		—
Farm Real Estate		726		15		614		13
Consumer and Other		—		—		—		—
Total	$	3,596	$	82	$	6,166	$	123

	June 30, 2018				June 30, 2017
For the three months ended:	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	993	$	6	$	1,643	$	6
Commercial Real Estate—Owner Occupied		524		8		1,795		26
Commercial Real Estate—Non-Owner Occupied		41		2		356		2
Residential Real Estate		1,321		17		1,572		19
Real Estate Construction		—		—		—		—
Farm Real Estate		785		8		614		7
Consumer and Other		—		—		—		—
Total	$	3,664	$	41	$	5,980	$	60

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

	For the Six-Month Period Ended June 30, 2018			For the Six-Month Period Ended June 30, 2017
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	15		$	49
Acquisition of PCI loans		—			—
Accretion		(9	)		(18	)
Balance at end of period	$	6		$	31

	For the Three-Month Period Ended June 30, 2018			For the Three-Month Period Ended June 30, 2017
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	8		$	40
Acquisition of PCI loans		—			—
Accretion		(2	)		(9	)
Balance at end of period	$	6		$	31

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

	At June 30, 2018		At December 31, 2017
	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	$	720	$	775
Carrying amount		169		215

There has been $29 and $126 in allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of June 30, 2018 and December 31, 2017, 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, 2018 and December 31, 2017, a total of $0 and $16, respectively of foreclosed assets were included in other assets. As of June 30, 2018 and December 31, 2017, the Company had initiated formal foreclosure procedures on $379 and $239, respectively, of consumer residential mortgages.