The following table summarizes the composition of our loan portfolio as of June 30, 2022 and December 31, 2021 (in thousands):

The accounting policy related to the allowance for credit losses is considered a critical policy given the level of estimation, judgment, and uncertainty in the levels of the allowance required to account for the expected losses in the loan portfolio and the material effect such estimation, judgment, and uncertainty can have on the consolidated financial results.

Accrued interest receivable on loans totaled $9.0 million and $10.8 million at June 30, 2022 and December 31, 2021, respectively, and is included in other assets in the consolidated balance sheets.

Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. In determining whether or not a borrower may be unable to meet payment obligations for each class of loans, we consider the borrower’s debt service capacity through the analysis of current financial information, if available, and/or current information with regards to our collateral position. Regulatory provisions would typically require the placement of a loan on nonaccrual status if (i) principal or interest has been in default for a period of 90 days or more unless the loan is both well secured and in the process of collection or (ii) full payment of principal and interest is not expected. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income on nonaccrual loans is recognized only to the extent that cash payments are received in excess of principal due. A loan may be returned to accrual status when all the principal and interest amounts contractually due are brought current and future principal and interest amounts contractually due are reasonably assured, which is typically evidenced by a sustained period (at least six months) of repayment performance by the borrower.

The following tables present the aging of the recorded investment in past due loans by class of loans as of June 30, 2022 and December 31, 2021 (in thousands):

The amortized cost, by class, of loans and leases on nonaccrual status at June 30, 2022 and December 31, 2021, were as follows (in thousands):

(1)	Nonaccrual loans include SBA guaranteed amounts totaling $0.8 million and $1.1 million at June 30, 2022 and December 31, 2021, respectively.

(2)	Nonaccrual loans with no credit loss allowance include SBA guaranteed amounts totaling $0.7 million and $1.1 million at June 30, 2022 and December 31, 2021, respectively.

We had $1.5 million and $0.3 million of PPP loans greater than 90 days past due and still accruing at June 30, 2022 and December 31, 2021, respectively.

The following table presents nonaccrual loans as of June 30, 2022 by class and year of origination (in thousands):



															Revolving
															Loans
													Revolving		Converted
	2022		2021		2020		2019		2018		Prior		Loans		To Term		Total
Commercial real estate - owner occupied	$	—	$	—	$	—	$	—	$	—	$	356	$	—	$	—	$	356
Secured by farmland		—		—		—		19		—		659		—		129		807
Construction and land development		—		—		—		—		—		32		—		—		32
Residential 1-4 family		—		—		—		8,600		—		475		—		265		9,340
Multi- family residential		—		—		—		—		—		4,151		—		—		4,151
Home equity lines of credit		—		—		—		—		—		—		616		23		639
Commercial loans		—		—		7		—		1,502		245		1,156		—		2,910
Paycheck Protection Program loans		—				—		—		—		—		—		—		—
Consumer loans		—		—		—		—		2		6		19		—		27
Total non-PCD nonaccruals		—		—		7		8,619		1,504		5,924		1,791		417		18,262
PCD loans		—		—		—		—		—		1,373		—		—		1,373
Total nonaccrual loans	$	—	$	—	$	7	$	8,619	$	1,504	$	7,297	$	1,791	$	417	$	19,635

Interest received on nonaccrual loans was $0.1 million and $0.05 million for the three months ended June 30, 2022 and 2021, respectively, and $0.3 million and $0.09 million for the six months ended June 30, 2022 and 2021, respectively.

Troubled Debt Restructurings

A modification is classified as a TDR if both of the following exist: (1) the borrower is experiencing financial difficulty and (2) the Bank has granted a concession to the borrower. The Bank determines that a borrower may be experiencing financial difficulty if the borrower is currently delinquent on any of its debt, or if the Bank is concerned that the borrower may not be able to perform in accordance with the current terms of the loan agreement in the foreseeable future. Many aspects of the borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty, particularly as it relates to commercial borrowers due to the complex nature of the loan structure, business/industry risk and borrower/guarantor structures. Concessions may include the reduction of an interest rate at a rate lower than current market rates for a new loan with similar risk, extension of the maturity date, reduction of accrued interest, or principal forgiveness. When evaluating whether a concession has been granted, the Bank also considers whether the borrower has provided additional collateral or guarantors and whether such additions adequately compensate the Bank for the restructured terms, or if the revised terms are consistent with those currently being offered to new loan customers. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty and whether a concession has been granted is subjective in nature and management’s judgment is required when determining whether a modification is a TDR.

Although each occurrence is unique to the borrower and is evaluated separately, for all portfolio segments, TDRs are typically modified through reduction in interest rates, reductions in payments, changing the payment terms from principal and interest to interest only, and/or extensions in term maturity.

As of June 30, 2022, there were 11 TDR loans outstanding in the amount of $2.7 million primarily due to the economic impact of COVID-19 on certain of the Bank’s borrowers. There have been no defaults of TDRs modified during the past twelve months.

Credit Quality Indicators

Through its system of internal controls, Primis evaluates and segments loan portfolio credit quality using regulatory definitions for Special Mention, Substandard and Doubtful. Special Mention loans are considered to be criticized. Substandard and Doubtful loans are considered to be classified.

Special Mention loans are loans that have a potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position.

Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Primis had no loans classified Doubtful at June 30, 2022 or December 31, 2021.

In monitoring credit quality trends in the context of assessing the appropriate level of the allowance for credit losses on loans, we monitor portfolio credit quality by the weighted-average risk grade of each class of loan.

The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of June 30, 2022 (in thousands):


															Revolving
															Loans
														Revolving	Converted
	2022		2021		2020		2019		2018		Prior		Loans		To Term		Total
Commercial real estate - owner occupied
Pass	$	48,503	$	60,905	$	19,728	$	34,832	$	27,892	$	219,330	$	10,509	$	6,838	$	428,537
Special Mention		—		—		—		—		—		1,190		—		—		1,190
Substandard		—		—		—		1		—		2,805		—		—		2,806
Doubtful		—		—		—		—		—		—		—		—		—
	$	48,503	$	60,905	$	19,728	$	34,833	$	27,892	$	223,325	$	10,509	$	6,838	$	432,533
Weighted average risk grade		3.20		3.49		3.38		3.49		3.43		3.52		3.16		3.96		3.46
Commercial real estate - nonowner occupied
Pass	$	22,983	$	122,209	$	36,361	$	31,382	$	61,577	$	262,383	$	3,001	$	3,099	$	542,995
Special Mention		—		—		—		—		15,072		40,306		—		601		55,979
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	22,983	$	122,209	$	36,361	$	31,382	$	76,649	$	302,689	$	3,001	$	3,700	$	598,974
Weighted average risk grade		3.22		3.17		3.71		3.92		3.83		3.82		2.67		3.32		3.66
Secured by farmland
Pass	$	857	$	23	$	60	$	—	$	—	$	3,580	$	1,499	$	92	$	6,111
Special Mention		—		—		—		—		—		1,033		—		—		1,033
Substandard		—		—		—		19		—		659		—		129		807
Doubtful		—		—		—		—		—		—		—		—		—
	$	857	$	23	$	60	$	19	$	—	$	5,272	$	1,499	$	221	$	7,951
Weighted average risk grade		3.43		4.00		4.00		6.00		N/A		4.18		3.98		4.33		4.07
Construction and land development
Pass	$	15,995	$	62,404	$	9,687	$	1,477	$	7,564	$	19,385	$	961	$	24	$	117,497
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		32		—		—		32
Doubtful		—		—		—		—		—		—		—		—		—
	$	15,995	$	62,404	$	9,687	$	1,477	$	7,564	$	19,417	$	961	$	24	$	117,529
Weighted average risk grade		3.29		3.12		3.80		3.68		3.24		3.67		3.31		4.00		3.31
Residential 1-4 family
Pass	$	120,609	$	157,734	$	46,431	$	65,915	$	43,122	$	157,392	$	1,935	$	3,179	$	596,317
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		8,599		—		1,122		—		265		9,986
Doubtful		—		—		—		—		—		—		—		—		—
	$	120,609	$	157,734	$	46,431	$	74,514	$	43,122	$	158,514	$	1,935	$	3,444	$	606,303
Weighted average risk grade		3.09		3.04		3.07		3.40		3.13		3.23		3.90		3.27		3.16
Multi- family residential
Pass	$	3,382	$	22,187	$	18,604	$	7,142	$	2,834	$	78,732	$	306	$	704	$	133,891
Special Mention		—		—		—		—		—		5,327		—		—		5,327
Substandard		—		—		—		—		—		4,889		—		299		5,188
Doubtful		—		—		—		—		—		—		—		—		—
	$	3,382	$	22,187	$	18,604	$	7,142	$	2,834	$	88,948	$	306	$	1,003	$	144,406
Weighted average risk grade		3.59		3.00		3.90		3.00		3.49		3.55		4.00		4.60		3.49
Home equity lines of credit
Pass	$	168	$	590	$	55	$	71	$	231	$	4,601	$	62,356	$	872	$	68,944
Special Mention		—		—		—		—		—		—		276		—		276
Substandard		—		—		—		—		—		—		617		23		640
Doubtful		—		—		—		—		—		—		—		—		—
	$	168	$	590	$	55	$	71	$	231	$	4,601	$	63,249	$	895	$	69,860
Weighted average risk grade		3.00		3.00		3.00		3.00		3.00		3.81		3.07		4.05		3.13
Commercial loans
Pass	$	176,511	$	68,077	$	9,581	$	8,472	$	9,870	$	23,506	$	97,155	$	45,432	$	438,604
Special Mention		—		—		—		1,997		—		—		509		—		2,506
Substandard		—		—		7		—		1,502		1,817		2,746		—		6,072
Doubtful		—		—		—		—		—		—		—		—		—
	$	176,511	$	68,077	$	9,588	$	10,469	$	11,372	$	25,323	$	100,410	$	45,432	$	447,182
Weighted average risk grade		2.95		3.41		3.40		3.99		3.77		3.72		3.26		3.72		3.27
Paycheck Protection Program loans
Pass	$	—	$	14,440	$	3,085	$	—	$	—	$	—	$	—	$	—	$	17,525
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	14,440	$	3,085	$	—	$	—	$	—	$	—	$	—	$	17,525
Weighted average risk grade		N/A		2.00		2.00		N/A		N/A		N/A		N/A		N/A		2.00


															Revolving
															Loans
														Revolving	Converted
	2022		2021		2020		2019		2018		Prior		Loans		To Term		Total
Consumer loans
Pass	$	136,676	$	31,200	$	1,885	$	551	$	679	$	5,002	$	3,569	$	—	$	179,562
Special Mention		—		—		—		—		—		72		—		—		72
Substandard		—		30		—		—		2		6		19		—		57
Doubtful		—		—		—		—		—		—		—		—		—
	$	136,676	$	31,230	$	1,885	$	551	$	681	$	5,080	$	3,588	$	—	$	179,691
Weighted average risk grade		3.11		3.81		3.99		3.99		4.01		4.02		3.96		N/A		3.29
PCD
Pass	$	—	$	—	$	—	$	—	$	—	$	3,960	$	—	$	—	$	3,960
Special Mention		—		—		—		—		—		1,353		—		—		1,353
Substandard		—		—		—		—		—		1,530		—		—		1,530
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	—	$	6,843	$	—	$	—	$	6,843
Weighted average risk grade		N/A		N/A		N/A		N/A		N/A		4.48		N/A		N/A		4.48
Total	$	525,684	$	539,799	$	145,484	$	160,458	$	170,345	$	840,012	$	185,458	$	61,557	$	2,628,797
Weighted average risk grade		3.07		3.19		3.44		3.55		3.55		3.60		3.21		3.72		3.37

The following table presents weighted-average risk grades for all loans, by class and year of origination/renewal as of December 31, 2021 (in thousands):



															Revolving
															Loans
														Revolving	Converted
	2021		2020		2019		2018		2017		Prior		Loans		To Term		Total
Commercial real estate - owner occupied
Pass	$	58,596	$	18,411	$	35,498	$	28,163	$	45,013	$	187,461	$	3,010	$	6,937	$	383,089
Special Mention		—		—		—		—		140		1,184		—		—		1,324
Substandard		—		—		475		—		—		2,815		—		—		3,290
Doubtful		—				—		—		—		—		—		—		—
	$	58,596	$	18,411	$	35,973	$	28,163	$	45,153	$	191,460	$	3,010	$	6,937	$	387,703
Weighted average risk grade		3.43		3.42		3.47		3.43		3.55		3.53		3.29		3.96		3.51
Commercial real estate - nonowner occupied
Pass	$	107,572	$	55,956		19,816	$	76,076	$	58,883	$	235,676	$	3,668	$	—	$	557,647
Special Mention		—		—		—		—		—		12,097		—		—		12,097
Substandard		—		—		—		—		—		17,655		—		601		18,256
Doubtful		—		—		—		—		—		—		—		—		—
	$	107,572	$	55,956	$	19,816	$	76,076	$	58,883	$	265,428	$	3,668	$	601	$	588,000
Weighted average risk grade		3.05		3.47		3.83		3.45		3.81		3.81		2.94		6.00		3.59
Secured by farmland
Pass	$	320	$	66	$	—	$	—	$	445	$	3,734	$	1,955	$	—	$	6,520
Special Mention		—		—		—		—		852		404		—		—		1,256
Substandard		—		—		24		—		681		—		131		—		836
Doubtful		—		—		—		—		—		—		—		—		—
	$	320	$	66	$	24	$	—	$	1,978	$	4,138	$	2,086	$	—	$	8,612
Weighted average risk grade		3.17		4.00		6.00		N/A		5.04		3.61		4.09		N/A		4.05
Construction and land development
Pass	$	57,320	$	14,003	$	13,360	$	7,061	$	8,414	$	15,664	$	982	$	31	$	116,835
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		4,575		—		—		34		—		—		4,609
Doubtful		—		—		—		—		—		—		—		—		—
	$	57,320	$	14,003	$	17,935	$	7,061	$	8,414	$	15,698	$	982	$	31	$	121,444
Weighted average risk grade		3.15		3.56		4.48		3.26		3.91		3.54		3.31		4.00		3.50
Residential 1-4 family
Pass	$	165,106	$	54,037	$	81,905	$	49,694	$	43,173	$	138,711	$	1,845	$	3,484	$	537,955
Special Mention		—		—		8,514		—		—		—		—		—		8,514
Substandard		—		—		—		—		—		795		—		296		1,091
Doubtful		—		—		—		—		—		—		—		—		—
	$	165,106	$	54,037	$	90,419	$	49,694	$	43,173	$	139,506	$	1,845	$	3,780	$	547,560
Weighted average risk grade		3.04		3.06		3.24		3.13		3.07		3.26		3.98		3.30		3.15
Multi- family residential
Pass	$	37,030	$	18,866	$	7,228	$	6,328	$	36,574	$	42,310	$	5,031	$	—	$	153,367
Special Mention		—		—		—		—		—		5,326		—		—		5,326
Substandard		—		—		—		—		—		5,076		—		302		5,378
Doubtful		—		—		—		—		—		—		—		—		—
	$	37,030	$	18,866	$	7,228	$	6,328	$	36,574	$	52,712	$	5,031	$	302	$	164,071
Weighted average risk grade		3.40		3.90		3.00		3.59		3.00		3.92		4.00		6.00		3.55
Home equity lines of credit
Pass	$	715	$	59	$	75	$	235	$	425	$	4,337	$	67,157	$	143	$	73,146
Special Mention		—		—		—		—		—		—		276		—		276
Substandard		—		—		—		—		—		—		398		26		424
Doubtful		—		—		—		—		—		—		—		—		—
	$	715	$	59	$	75	$	235	$	425	$	4,337	$	67,831	$	169	$	73,846
Weighted average risk grade		3.00		3.00		3.00		3.00		3.77		3.79		3.09		4.31		3.14
Commercial loans
Pass	$	95,085	$	10,415	$	11,923	$	10,648	$	10,522	$	18,284	$	134,302	$	5,338	$	296,517
Special Mention		—		—		—		—		—		—		845		—		845
Substandard		—		9		—		1,508		—		1,938		1,163		—		4,618
Doubtful		—		—		—		—		—		—		—		—		—
	$	95,085	$	10,424	$	11,923	$	12,156	$	10,522	$	20,222	$	136,310	$	5,338	$	301,980
Weighted average risk grade		3.43		3.36		3.79		3.77		2.95		3.96		3.43		3.95		3.48
Paycheck Protection Program loans
Pass	$	56,087	$	21,232	$	—	$	—	$	—	$	—	$	—	$	—	$	77,319
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
	$	56,087	$	21,232	$	—	$	—	$	—	$	—	$	—	$	—	$	77,319
Weighted average risk grade		2.00		2.00		N/A		N/A		N/A		N/A		N/A		N/A		2.00


															Revolving
															Loans
														Revolving	Converted
	2021		2020		2019		2018		2017		Prior		Loans		To Term		Total
Consumer loans
Pass	$	48,107	$	2,351	$	1,002	$	914	$	237	$	5,766	$	2,519	$	—	$	60,896
Special Mention		—		—		—		—		—		82		—		—		82
Substandard		—		—		—		7		9		2		—		—		18
Doubtful		—		—		—		—		—		—		—		—		—
	$	48,107	$	2,351	$	1,002	$	921	$	246	$	5,850	$	2,519	$	—	$	60,996
Weighted average risk grade		3.55		3.99		3.99		4.02		4.07		4.01		4.00		N/A		3.65
PCD
Pass	$	—	$	—	$	—	$	—	$	—	$	5,145	$	30	$	—	$	5,175
Special Mention		—		—		—		—		—		1,391		—		—		1,391
Substandard		—		—		—		—		1,717		172		—		—		1,889
Doubtful		—		—		—		—		—		—		—		—		—
	$	—	$	—	$	—	$	—	$	1,717	$	6,708	$	30	$	—	$	8,455
Weighted average risk grade		N/A		N/A		N/A		N/A		6.00		4.08		3.00		N/A		4.47
Total	$	625,938	$	195,405	$	184,395	$	180,634	$	207,085	$	706,059	$	223,312	$	17,158	$	2,339,986
Weighted average risk grade		3.12		3.24		3.50		3.38		3.45		3.64		3.35		3.92		3.39

Revolving loans that converted to term during 2022 were as follows (in thousands):


	For the three months ended June 30, 2022		For the six months ended June 30, 2022
Commercial real estate - non-owner occupied	$	3,099	$	3,099
Secured by farmland		129		220
Residential 1-4 family		174		422
Multi- family residential		704		704
Home equity lines of credit		—		740
Commercial loans		40,325		40,459
Total loans	$	44,431	$	45,644

The amount of foreclosed residential real estate property held at June 30, 2022 and December 31, 2021 was $0.8 million and $0.9 million, respectively. There were no recorded investments in consumer mortgage loans collateralized by residential real estate property in the process of foreclosure at June 30, 2022 and December 31, 2021.

Allowance For Credit Losses – Loans

The allowance for credit losses on loans is a contra-asset valuation account, calculated in accordance with ASC 326 that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the allowance represents management's best estimate of current expected credit losses on loans considering available information, from internal and external sources, relevant to assessing collectability over the loans' contractual terms, adjusted for expected prepayments when appropriate.

In calculating the allowance for credit losses, most loans are segmented into pools based upon similar characteristics and risk profiles. For allowance modeling purposes, our loan pools include (i) commercial real estate - owner occupied, (ii) commercial real estate - non-owner occupied, (iii) construction and land development, (iv) commercial, (v) agricultural loans, (vi) residential 1-4 family and (vii) consumer loans. We periodically reassess each pool to ensure the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary. For each loan pool, we measure expected credit losses over the life of each loan utilizing a combination of inputs: (i) probability of default, (ii) probability of attrition, (iii) loss given default and (iv) exposure at default. Internal data is supplemented by, but not replaced by, peer data when required, primarily to determine the probability of default input. The various pool-specific inputs may be adjusted for current macroeconomic assumptions. Significant macroeconomic variables utilized in our allowance models include, among other things, (i) VA Gross Domestic Product, (ii) VA House Price Index, and (iii) VA unemployment rates.

Management qualitatively adjusts allowance model results for risk factors that are not considered within our quantitative modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. Qualitative factor (“Q-Factor”) adjustments are driven by key risk indicators that management tracks on a pool-by-pool basis.

In some cases, management may determine that an individual loan exhibits unique risk characteristics which differentiate the loan from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation.

The following tables present details of the allowance for credit losses on loans segregated by loan portfolio segment as of June 30, 2022 and December 31, 2021, calculated in accordance with the current expected credit losses (“CECL”) methodology described above (in thousands).


	Commercial		Commercial										Home
	Real Estate		Real Estate				Construction						Equity				Paycheck
	Owner		Non-owner		Secured by		and Land		1-4 Family		Multi-Family		Lines Of		Commercial		Protection		Consumer		PCD
June 30, 2022	Occupied		Occupied		Farmland		Development		Residential		Residential		Credit		Loans		Program		Loans		Loans		Total
Modeled expected credit losses	$	4,014	$	7,411	$	10	$	610	$	3,431	$	1,715	$	272	$	3,592	$	—	$	1,550	$	—	$	22,605
Q-factor and other qualitative adjustments		287		506		39		414		841		445		91		809		—		—		—		3,432
Specific allocations		—		—		—		—		—		—		—		2,027		—		19		2,126		4,172
Total	$	4,301	$	7,917	$	49	$	1,024	$	4,272	$	2,160	$	363	$	6,428	$	—	$	1,569	$	2,126	$	30,209

	Commercial		Commercial										Home
	Real Estate		Real Estate				Construction						Equity				Paycheck
	Owner		Non-owner		Secured by		and Land		1-4 Family		Multi-Family		Lines Of		Commercial		Protection		Consumer		PCD
December 31, 2021	Occupied		Occupied		Farmland		Development		Residential		Residential		Credit		Loans		Program		Loans		Loans		Total
Modeled expected credit losses	$	4,281	$	8,020	$	9	$	540	$	3,012	$	1,885	$	273	$	2,154	$	—	$	786	$	—	$	20,960
Q-factor and other qualitative adjustments		281		1,008		47		458		576		1,395		164		1,276		—		—		—		5,205
Specific allocations		—		—		—		—		—		—		—		658		—		1		2,281		2,940
Total	$	4,562	$	9,028	$	56	$	998	$	3,588	$	3,280	$	437	$	4,088	$	—	$	787	$	2,281	$	29,105

No allowance for credit losses has been recognized for PPP loans as such loans are fully guaranteed by the SBA.

Activity in the allowance for credit losses by class of loan for the three months ended June 30, 2022 and 2021 is summarized below (in thousands):


	Commercial		Commercial
	Real Estate		Real Estate				Construction						Home Equity
	Owner		Non-owner		Secured by		and Land		1-4 Family		Multi-Family		Lines Of		Commercial		Consumer		PCD
Three Months Ended June 30, 2022	Occupied		Occupied		Farmland		Development		Residential		Residential		Credit		Loans		Loans		Loans		Total
Allowance for credit losses:
Beginning balance	$	4,173	$	8,913	$	49	$	1,029	$	3,888	$	2,289	$	376	$	5,466	$	1,025	$	2,171	$	29,379
Provision (recovery)		142		(1,498)		—		(5)		384		(129)		(14)		962		625		(45)		422
Charge offs		(14)		—		—		—		—		—		—		—		(84)		—		(98)
Recoveries		—		502		—		—		—		—		1		—		3		—		506
Ending balance	$	4,301	$	7,917	$	49	$	1,024	$	4,272	$	2,160	$	363	$	6,428	$	1,569	$	2,126	$	30,209

Three Months Ended June 30, 2021
Allowance for credit losses:
Beginning balance	$	4,144	$	13,804	$	111	$	3,066	$	6,770	$	1,246	$	825	$	2,192	$	369	$	2,366	$	34,893
Provision (recovery)		794		(2,569)		(31)		(375)		(2,328)		(157)		(224)		633		70		(28)		(4,215)
Charge offs		(169)		—		—		—		—		—		—		—		(18)		—		(187)
Recoveries		—		—		—		—		9		1		—		757		7		—		774
Ending balance	$	4,769	$	11,235	$	80	$	2,691	$	4,451	$	1,090	$	601	$	3,582	$	428	$	2,338	$	31,265

Activity in the allowance for credit losses by class of loan for the six months ended June 30, 2022 and 2021 is summarized below (in thousands):


	Commercial		Commercial
	Real Estate		Real Estate				Construction						Home Equity
	Owner		Non-owner		Secured by		and Land		1-4 Family		Multi-Family		Lines Of		Commercial		Consumer		PCD
Six Months Ended June 30, 2022	Occupied		Occupied		Farmland		Development		Residential		Residential		Credit		Loans		Loans		Loans		Total
Allowance for credit losses:
Beginning balance	$	4,562	$	9,028	$	56	$	998	$	3,588	$	3,280	$	437	$	4,088	$	787	$	2,281	$	29,105
Provision (recovery)		(247)		(1,613)		(7)		26		627		(1,120)		(61)		2,170		901		(155)		521
Charge offs		(14)		—		—		—		—		—		(14)		—		(131)		—		(159)
Recoveries		—		502		—		—		57		—		1		170		12		—		742
Ending balance	$	4,301	$	7,917	$	49	$	1,024	$	4,272	$	2,160	$	363	$	6,428	$	1,569	$	2,126	$	30,209

Six Months Ended June 30, 2021
Allowance for credit losses:
Beginning balance	$	6,699	$	11,426	$	104	$	1,815	$	9,579	$	1,412	$	901	$	1,498	$	517	$	2,394	$	36,345
Provision (recovery)		(1,761)		(191)		(24)		876		(5,138)		(323)		(300)		1,393		(63)		(56)		(5,587)
Charge offs		(169)		—		—		—		—		—		—		(74)		(54)		—		(297)
Recoveries		—		—		—		—		10		1		—		765		28		—		804
Ending balance	$	4,769	$	11,235	$	80	$	2,691	$	4,451	$	1,090	$	601	$	3,582	$	428	$	2,338	$	31,265

Generally, a commercial loan, or a portion thereof, is charged-off when it is determined, through the analysis of any available current financial information with regards to the borrower, that the borrower is incapable of servicing unsecured debt, there is little or no prospect for near term improvement and no realistic strengthening action of significance is pending or, in the case of secured debt, when it is determined, through analysis of current information with regards to our collateral position, that amounts due from the borrower are in excess of the calculated current fair value of the collateral. Losses on installment loans are recognized in accordance with regulatory guidelines. All other consumer loan losses are recognized when delinquency exceeds 120 cumulative days.

The following table presents loans that were evaluated for expected credit losses on an individual basis and the related specific allocations, by loan portfolio segment as of June 30, 2022 and December 31, 2021 (in thousands):


	June 30, 2022				December 31, 2021
	Loan		Specific		Loan		Specific
	Balance ⁽¹⁾		Allocations		Balance ⁽¹⁾		Allocations
Commercial real estate - owner occupied	$	2,805	$	—	$	3,291	$	—
Commercial real estate - non-owner occupied		—		—		18,256		—
Secured by farmland		659		—		681		—
Construction and land development		—		—		4,575		—
Residential 1-4 family		9,244		—		541		—
Multi- family residential		10,516		—		5,378		—
Home equity lines of credit		23		—		—		—
Commercial loans		5,221		2,027		3,688		658
Consumer loans		32		19		7		1
Total non-PCD loans		28,500		2,046		36,417		659
PCD loans		6,843		2,126		8,455		2,281
Total loans	$	35,343	$	4,172	$	44,872	$	2,940

(1)	Includes SBA guarantees of $0.7 million at June 30, 2022 and December 31, 2021.