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Accounting for Certain Loans Acquired in a Purchase
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Accounting for Certain Loans Acquired in a Purchase
ACCOUNTING FOR CERTAIN LOANS ACQUIRED IN A PURCHASE

Purchase Credit Impaired Loans are included in NOTE 5. LOANS AND ALLOWANCE of these Notes to Consolidated Financial Statements. As described in NOTE 5, purchased loans are recorded at the acquisition date fair value, which could result in a fair value discount or premium. Purchased loans with evidence of credit deterioration since origination and for which it is probable at the date of acquisition that the acquirer will not collect all contractually required principal and interest payments are accounted for under ASC 310-30, Loans Acquired with Deteriorated Credit Quality. The difference between contractually required payments and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. The accretable portion of the fair value discount or premium is the difference between the expected cash flows and the net present value of expected cash flows, with such difference accreted into earnings over the term of the loans.

The outstanding balance of purchased credit impaired loans as of December 31, 2019 was $25.3 million which had a carrying amount of $16.1 million and $124,000 of related allowance for loan losses. As of December 31, 2018, the outstanding balance of purchased credit impaired loans was $26.3 million with a carrying amount of $17.3 million with no required allowance for loan losses. As customer cash flow expectations improve, nonaccretable yield can be reclassified to accretable yield. The accretable amount, or income expected to be collected, and reclassifications from nonaccretable, are identified in the table below.
 
Twelve Months Ended December 31, 2019

Twelve Months Ended December 31, 2018

Twelve Months Ended December 31, 2017
Beginning balance
$
2,143


$
2,890


$
3,950

Additions
576


—


1,608

Accretion
(2,387
)

(4,118
)

(6,749
)
Reclassification from nonaccretable
1,965


3,387


4,748

Disposals
(165
)

(16
)

(667
)
Ending balance
$
2,132


$
2,143


$
2,890




The following table presents loans acquired during the period ending December 31, 2019, for which it was probable at acquisition that all contractually required payments would not be collected. There were no loans acquired during the period ending December 31, 2018.

2019

MBT
Contractually required payments receivable at acquisition date
$
6,840

Nonaccretable difference
2,733

Expected cash flows at acquisition date
4,107

Accretable difference
576

Basis in loans at acquisition date
$
3,531