Loans and Allowance for Loan Losses | Note 5. Loans and Allowance for Loan Losses Portfolio Segmentation: Major categories of loans are summarized as follows (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā ā PCI ā All Other ā ā ā ā PCI ā All Other ā ā ā ā Loans 1 Loans Total Loans 1 Loans Total Commercial real estate ā $ 16,517 ā $ 1,000,516 ā $ 1,017,033 ā $ 15,255 ā $ 890,051 ā $ 905,306 Consumer real estate ā 11,568 ā 448,292 ā 459,860 ā 6,541 ā 410,941 ā 417,482 Construction and land development ā 6,427 ā 272,789 ā 279,216 ā 4,458 ā 223,168 ā 227,626 Commercial and industrial ā 341 ā 637,109 ā 637,450 ā 407 ā 336,668 ā 337,075 Consumer and other ā 106 ā 14,619 ā 14,725 ā 326 ā 9,577 ā 9,903 Total loans ā 34,959 ā 2,373,325 ā 2,408,284 ā 26,987 ā 1,870,405 ā 1,897,392 Less: Allowance for loan losses ā ā ā (16,254) ā (16,254) ā (156) ā (10,087) ā (10,243) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Loans, net ā $ 34,959 ā $ 2,357,071 ā $ 2,392,030 ā $ 26,831 ā $ 1,860,318 ā $ 1,887,149 1 ā For purposes of the disclosures required pursuant to the adoption of ASC 310, the loan portfolio was disaggregated into segments. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. There are five loan portfolio segments that include commercial real estate, consumer real estate, construction and land development, commercial and industrial, and consumer and other. The composition of loans by loan classification for impaired and performing loan status is summarized in the tables below (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction ā Commercial ā ā ā ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā Consumer ā ā ā ā ā Real Estate ā Real Estate ā Development ā Industrial ā and Other ā Total June 30, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans $ 999,567 ā $ 446,892 ā $ 272,789 ā $ 636,952 ā $ 14,619 ā $ 2,370,819 Impaired loans ā 949 ā 1,400 ā ā ā 157 ā ā ā 2,506 ā ā 1,000,516 ā 448,292 ā 272,789 ā 637,109 ā 14,619 ā 2,373,325 PCI loans ā 16,517 ā 11,568 ā 6,427 ā 341 ā 106 ā 34,959 Total loans ā $ 1,017,033 ā $ 459,860 ā $ 279,216 ā $ 637,450 ā $ 14,725 ā $ 2,408,284 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā Performing loans $ 889,795 ā $ 409,394 ā $ 222,621 ā $ 336,508 ā $ 9,577 ā $ 1,867,895 Impaired loans ā 256 ā 1,547 ā 547 ā 160 ā ā ā 2,510 ā ā 890,051 ā 410,941 ā 223,168 ā 336,668 ā 9,577 ā 1,870,405 PCI loans ā 15,255 ā 6,541 ā 4,458 ā 407 ā 326 ā 26,987 Total loans ā $ 905,306 ā $ 417,482 ā $ 227,626 ā $ 337,075 ā $ 9,903 ā $ 1,897,392 ā The following tables show the allowance for loan losses allocation by loan classification for impaired, PCI, and performing loans (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction ā Commercial ā Consumer ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā and ā ā ā ā ā Real Estate ā Real Estate ā Development ā Industrial ā Other ā Total June 30, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans $ 6,551 $ 3,021 $ 1,795 $ 4,314 $ 108 $ 15,789 Impaired loans ā 44 ā 292 ā ā ā 129 ā ā ā 465 ā ā 6,595 ā 3,313 ā 1,795 ā 4,443 ā 108 ā 16,254 PCI loans ā ā ā ā ā ā ā ā ā ā ā ā Total loans ā $ 6,595 ā $ 3,313 ā $ 1,795 ā $ 4,443 ā $ 108 ā $ 16,254 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans $ 4,491 $ 2,159 $ 1,127 $ 1,766 $ 69 $ 9,612 Impaired loans ā ā ā 343 ā ā ā 132 ā ā ā 475 ā ā 4,491 ā 2,502 ā 1,127 ā 1,898 ā 69 ā 10,087 PCI loans ā 17 ā 74 ā ā ā 59 ā 6 ā 156 Total loans ā $ 4,508 ā $ 2,576 ā $ 1,127 ā $ 1,957 ā $ 75 ā $ 10,243 ā The following tables detail the changes in the allowance for loan losses by loan classification (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, 2020 ā ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā and Other ā Total Beginning balance $ 5,963 $ 3,301 $ 1,484 $ 2,557 $ 126 $ 13,431 Charged off loans ā ā ā ā ā ā ā (9) ā (66) ā (75) Recoveries of charge-offs ā 3 ā 11 ā ā ā 6 ā 28 ā 48 Provision (reallocation) charged to expense ā 629 ā 1 ā 311 ā 1,889 ā 20 ā 2,850 Ending balance ā $ 6,595 ā $ 3,313 ā $ 1,795 ā $ 4,443 ā $ 108 ā $ 16,254 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, 2019 ā ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā and Other ā Total Beginning balance $ 4,074 $ 1,949 $ 854 $ 1,709 $ 118 $ 8,704 Charged off loans ā ā ā ā ā ā ā (14) ā (80) ā (94) Recoveries of charge-offs ā 22 ā 16 ā 2 ā 41 ā 13 ā 94 Provision (reallocation) charged to expense ā 6 ā 224 ā 90 ā 10 ā 63 ā 393 Ending balance ā $ 4,102 ā $ 2,189 ā $ 946 ā $ 1,746 ā $ 114 ā $ 9,097 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, 2020 ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā and Other ā Total Beginning balance $ 4,508 $ 2,576 $ 1,127 $ 1,957 $ 75 $ 10,243 Loans charged off ā ā ā (2) ā ā ā (17) ā (142) ā (161) Recoveries of loans charged off ā 5 ā 17 ā 2 ā 49 ā 50 ā 123 Provision (reallocation) charged to expense ā 2,082 ā 722 ā 666 ā 2,454 ā 125 ā 6,049 Ending balance ā $ 6,595 ā $ 3,313 ā $ 1,795 ā $ 4,443 ā $ 108 ā $ 16,254 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, 2019 ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā and Other ā Total Beginning balance $ 3,639 $ 1,789 $ 795 $ 1,746 $ 306 $ 8,275 Loans charged off ā ā ā (2) ā ā ā (333) ā (210) ā (545) Recoveries of loans charged off ā 24 ā 20 ā 4 ā 53 ā 76 ā 177 Provision (reallocation) charged to expense ā 439 ā 382 ā 147 ā 280 ā (58) ā 1,190 Ending balance ā $ 4,102 ā $ 2,189 ā $ 946 ā $ 1,746 ā $ 114 ā $ 9,097 ā The following tables outline the amount of each loan classification and the amount categorized into each risk rating (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā ā ā ā ā ā ā ā Construction ā Commercial ā ā ā ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā Consumer ā ā ā Non PCI Loans: ā Real Estate ā Real Estate Development ā Industrial ā and Other ā Total Pass $ 526,141 $ 390,787 $ 227,302 $ 573,989 $ 14,259 $ 1,732,478 Watch ā 462,734 ā 55,210 ā 45,416 ā 61,888 ā 288 ā 625,536 Special mention ā 10,586 ā 599 ā ā ā 892 ā ā ā 12,077 Substandard ā 1,055 ā 1,534 ā 71 ā 207 ā 48 ā 2,915 Doubtful ā ā ā 162 ā ā ā 133 ā 24 ā 319 Total ā ā 1,000,516 ā ā 448,292 ā ā 272,789 ā ā 637,109 ā ā 14,619 ā ā 2,373,325 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā PCI Loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā 8,082 ā 9,028 ā 1,353 ā 249 ā 83 ā 18,795 Watch ā 7,314 ā 922 ā 4,520 ā ā ā 16 ā 12,772 Special mention ā 20 ā 57 ā ā ā ā ā ā ā 77 Substandard ā 1,101 ā 1,561 ā 554 ā 92 ā 7 ā 3,315 Doubtful ā ā ā ā ā ā ā ā ā ā ā ā Total ā ā 16,517 ā ā 11,568 ā ā 6,427 ā ā 341 ā ā 106 ā ā 34,959 Total loans ā $ 1,017,033 ā $ 459,860 ā $ 279,216 ā $ 637,450 ā $ 14,725 ā $ 2,408,284 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā ā ā ā ā ā Construction ā Commercial ā ā ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā Consumer ā ā ā Non PCI Loans: ā Real Estate ā Real Estate Development ā Industrial ā and Other ā Total Pass $ 860,447 $ 407,336 $ 216,459 $ 328,564 $ 9,462 $ 1,822,268 Watch ā 25,180 ā 989 ā 6,089 ā 6,786 ā 40 ā 39,084 Special mention ā 4,057 ā 738 ā ā ā 1,033 ā ā ā 5,828 Substandard ā 367 ā 1,713 ā 620 ā 228 ā 51 ā 2,979 Doubtful ā ā ā 165 ā ā ā 57 ā 24 ā 246 Total ā ā 890,051 ā ā 410,941 ā ā 223,168 ā ā 336,668 ā ā 9,577 ā ā 1,870,405 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā PCI Loans: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā 12,473 ā 5,258 ā 902 ā 41 ā 300 ā 18,974 Watch ā 2,234 ā 38 ā 3,556 ā ā ā 13 ā 5,841 Special mention ā 139 ā 60 ā ā ā ā ā ā ā 199 Substandard ā 409 ā 1,185 ā ā ā 366 ā 13 ā 1,973 Doubtful ā ā ā ā ā ā ā ā ā ā ā ā Total ā ā 15,255 ā ā 6,541 ā ā 4,458 ā ā 407 ā ā 326 ā ā 26,987 Total loans ā $ 905,306 ā $ 417,482 ā $ 227,626 ā $ 337,075 ā $ 9,903 ā $ 1,897,392 ā Past Due Loans: A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. Generally, management places a loan on nonaccrual when there is a clear indicator that the borrowerās cash flow may not be sufficient to meet payments as they become due, which is generally when a loan is 90 days past due. The following tables present an aging analysis of our loan portfolio (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā 30-60 Days 61-89 Days Past Due 90 ā ā Total ā ā ā ā ā ā ā Past Due and Past Due and Days or More ā ā ā Past Due and PCI Current Total ā Accruing Accruing and Accruing ā Nonaccrual ā Nonaccrual ā Loans ā Loans ā Loans Commercial real estate ā $ 1,019 ā $ 188 ā $ 1 ā $ 815 ā $ 2,023 ā $ 16,517 ā $ 998,493 ā $ 1,017,033 Consumer real estate ā 1,726 ā 457 ā 138 ā 1,891 ā 4,212 ā 11,568 ā 444,080 ā 459,860 Construction and land development ā 602 ā ā ā 265 ā ā ā 867 ā 6,427 ā 271,922 ā 279,216 Commercial and industrial ā 84 ā 93 ā 465 ā 121 ā 763 ā 341 ā 636,346 ā 637,450 Consumer and other ā 134 ā 2 ā 8 ā 72 ā 216 ā 106 ā 14,403 ā 14,725 Total ā $ 3,565 ā $ 740 ā $ 877 ā $ 2,899 ā $ 8,081 ā $ 34,959 ā $ 2,365,244 ā $ 2,408,284 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā 30-60 Days 61-89 Days Past Due 90 ā ā Total ā ā ā ā ā ā ā Past Due and Past Due and Days or More ā ā ā Past Due and PCI Current Total ā Accruing Accruing and Accruing ā Nonaccrual ā Nonaccrual ā Loans ā Loans ā Loans Commercial real estate ā $ 466 ā $ 22 ā $ ā ā $ 124 ā $ 612 ā $ 15,255 ā $ 889,439 ā $ 905,306 Consumer real estate ā 1,564 ā 30 ā ā ā 1,872 ā 3,466 ā 6,541 ā 407,475 ā 417,482 Construction and land development ā 507 ā ā ā 607 ā 620 ā 1,734 ā 4,458 ā 221,434 ā 227,626 Commercial and industrial ā 559 ā 53 ā ā ā 57 ā 669 ā 407 ā 335,999 ā 337,075 Consumer and other ā 86 ā 14 ā ā ā 70 ā 170 ā 326 ā 9,407 ā 9,903 Total ā $ 3,182 ā $ 119 ā $ 607 ā $ 2,743 ā $ 6,651 ā $ 26,987 ā $ 1,863,754 ā $ 1,897,392 ā Impaired Loans: The following is an analysis of the impaired loan portfolio, including PCI loans, detailing the related allowance recorded (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 December 31, 2019 ā ā ā Unpaid ā ā ā ā Unpaid ā ā ā Recorded Principal Related Recorded Principal Related ā ā Investment Balance ā Allowance ā Investment Balance ā Allowance Impaired loans without a valuation allowance: ā ā ā ā ā ā Commercial real estate ā $ 553 ā $ 553 ā $ ā ā $ 256 ā $ 261 ā $ ā Consumer real estate ā 720 ā 721 ā ā ā 553 ā 553 ā ā Construction and land development ā ā ā ā ā ā ā 547 ā 547 ā ā Commercial and industrial ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā 1,273 ā 1,274 ā ā ā 1,356 ā 1,361 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Impaired loans with a valuation allowance: ā ā ā ā ā ā Commercial real estate ā 396 ā 402 ā 44 ā ā ā ā ā ā Consumer real estate ā 680 ā 680 ā 292 ā 994 ā 994 ā 343 Construction and land development ā ā ā ā ā ā ā ā ā ā ā ā Commercial and industrial ā 157 ā 157 ā 129 ā 160 ā 160 ā 132 Consumer and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā 1,233 ā 1,239 ā 465 ā 1,154 ā 1,154 ā 475 PCI loans: ā ā ā ā ā ā Commercial real estate ā 16 ā 99 ā ā ā 17 ā 99 ā 17 Consumer real estate ā 1,870 ā 2,138 ā ā ā 1,205 ā 1,371 ā 74 Construction and land development ā ā ā ā ā ā ā ā ā ā ā ā Commercial and industrial ā 303 ā 445 ā ā ā 396 ā 534 ā 59 Consumer and other ā 30 ā 35 ā ā ā 45 ā 51 ā 6 ā ā 2,219 ā 2,717 ā ā ā 1,663 ā 2,055 ā 156 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total impaired loans ā $ 4,725 ā $ 5,230 ā $ 465 ā $ 4,173 ā $ 4,570 ā $ 631 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā ā ā 2020 ā 2019 ā ā Average Interest Average Interest ā ā Recorded Income Recorded Income ā ā ā Investment ā Recognized Investment Recognized ā Impaired loans without a valuation allowance: ā ā ā ā ā Commercial real estate ā $ 345 ā $ 1 ā $ 424 ā $ 5 ā Consumer real estate ā 633 ā 10 ā 624 ā ā ā Construction and land development ā 304 ā ā ā 650 ā 2 ā Commercial and industrial ā ā ā ā ā 16 ā ā ā Consumer and other ā ā ā ā ā 14 ā ā ā ā ā 1,282 ā 11 ā 1,728 ā 7 ā Impaired loans with a valuation allowance: ā ā ā ā ā Commercial real estate ā 396 ā ā ā 24 ā ā ā Consumer real estate ā 827 ā 5 ā 217 ā 2 ā Construction and land development ā ā ā ā ā 28 ā ā ā Commercial and industrial ā 158 ā 3 ā 293 ā ā ā Consumer and other ā ā ā ā ā 13 ā ā ā ā ā 1,381 ā 8 ā 575 ā 2 ā PCI loans: ā ā ā ā ā Commercial real estate ā 490 ā ā ā 2,529 ā ā ā Consumer real estate ā 1,168 ā 38 ā 1,099 ā ā ā Construction and land development ā 116 ā ā ā ā ā ā ā Commercial and industrial ā 338 ā 3 ā ā ā ā ā Consumer real estate ā 22 ā ā ā ā ā ā ā ā ā 2,134 ā 41 ā 3,628 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total impaired loans ā $ 4,797 ā $ 60 ā $ 5,931 ā $ 9 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, ā ā 2020 ā 2019 ā Average Interest Average Interest ā Recorded Income Recorded Income ā ā Investment ā Recognized Investment Recognized Impaired loans without a valuation allowance: ā ā ā ā Commercial real estate ā $ 315 ā $ 4 ā $ 495 ā $ 25 Consumer real estate ā 606 ā 14 ā 774 ā 4 Construction and land development ā 385 ā ā ā 616 ā 1 Commercial and industrial ā ā ā ā ā 33 ā 1 Consumer and other ā ā ā ā ā 19 ā ā ā ā 1,306 ā 18 ā 1,937 ā 31 Impaired loans with a valuation allowance: ā ā ā ā ā Commercial real estate ā 264 ā 2 ā 16 ā ā Consumer real estate ā 882 ā 14 ā 199 ā 9 Construction and land development ā ā ā ā ā 19 ā ā Commercial and industrial ā 158 ā 5 ā 514 ā 9 Consumer and other ā ā ā ā ā 38 ā ā ā ā 1,304 ā 21 ā 786 ā 18 PCI loans: ā ā ā ā Commercial real estate ā 333 ā 1 ā 1,686 ā (9) Consumer real estate ā 1,174 ā 39 ā 732 ā 2 Construction and land development ā 77 ā ā ā ā ā ā Commercial and industrial ā 361 ā 3 ā ā ā ā Consumer and other ā 31 ā ā ā ā ā ā ā ā 1,976 ā 43 ā 2,418 ā (7) ā ā ā ā ā ā ā ā ā ā ā ā ā Total impaired loans ā $ 4,586 ā $ 82 ā $ 5,141 ā $ 42 ā Troubled Debt Restructurings: At June 30, 2020, and December 31, 2019, impaired loans included loans that were classified as TDRs. The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. In assessing whether or not a borrower is experiencing financial difficulties, the Company considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the debtor is currently in payment default on any of its debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the debtor has declared or is in the process of declaring bankruptcy; and (iv) the debtorās projected cash flow is sufficient to satisfy contractual payments due under the original terms of the loan without a modification. The Company considers all aspects of the modification to loan terms to determine whether or not a concession has been granted to the borrower. Key factors considered by the Company include the debtorās ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan. The most common concessions granted by the Company generally include one or more modifications to the terms of the debt, such as (i) a reduction in the interest rate for the remaining life of the debt; (ii) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk; (iii) a temporary period of interest-only payments; and (iv) a reduction in the contractual payment amount for either a short period or remaining term of the loan. As of June 30, 2020, and December 31, 2019, management had approximately $9 thousand and $61 thousand, respectively, in loans that met the criteria for TDR, none of which were on nonaccrual. A loan is placed back on accrual status when both principal and interest are current and it is probable that the Company will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement. There was one loan that was modified as a TDR during the six month period ended June 30, 2020, and no loans were modified during the six month period ended June 30, 2019. There were no loans that were modified as TDRs during the past six months and for which there was a subsequent payment default. The Company began offering short-term loan modifications to assist borrowers during the COVID-19 national emergency. The Coronavirus Aid Relief and Economic Security (āCARESā) Act along with a joint agency statement issued by banking agencies, provides that short-term modifications made in response to COVID-19 does not need to be accounted for as a TDR. Accordingly, the Company does not account for such loan modifications as TDRs. See Note 1 Summary of Significant Accounting Policies Foreclosure Proceedings and Balances : As of June 30, 2020, there were five residential properties secured by real estate included in other real estate owned and there were no consumer mortgage loans collateralized by residential real estate property that were in the process of foreclosure. Purchased Credit Impaired Loans: The Company has acquired loans where there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans are as follows (in thousands) ā ā ā ā ā ā ā ā ā June 30, December 31, ā 2020 2019 Commercial real estate ā $ 24,551 ā $ 21,570 Consumer real estate ā 14,191 ā 8,411 Construction and land development ā 7,610 ā 5,394 Commercial and industrial ā 2,212 ā 2,540 Consumer and other ā 240 ā 504 Total loans ā 48,804 ā 38,419 Less: Remaining purchase discount ā (13,845) ā (11,432) Total loans, net of purchase discount ā 34,959 ā 26,987 Less: Allowance for loan losses ā ā ā (156) Carrying amount, net of allowance ā $ 34,959 ā $ 26,831 ā Activity related to the accretable yield on loans acquired with deteriorated credit quality is as follows (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Six Months Ended ā ā June 30, ā June 30, ā 2020 2019 2020 2019 Accretable yield, beginning of period ā $ 10,979 ā $ 8,644 ā $ 8,454 ā $ 7,052 Additions ā ā ā ā ā 2,515 ā ā Accretion income ā (1,057) ā (1,026) ā (3,134) ā (2,280) Reclassification ā 247 ā 323 ā 2,163 ā 1,358 Other changes, net ā 1,608 ā 339 ā 1,779 ā 2,150 Accretable yield, end of period ā $ 11,777 ā $ 8,280 ā $ 11,777 ā $ 8,280 ā |