Note 4 – Allowance for Loan Losses

Changes in the allowance for loan losses by segment of loans based on method of impairment for the three and six months ended June 30, 2014, were as follows:



Allowance for loan losses:			Real Estate		Real Estate		Real Estate
	Commercial		Commercial 1		Construction		Residential		Consumer		Unallocated		Total
Three months ended June 30, 2014
Beginning balance	$	2,326	$	14,066	$	1,998	$	2,268	$	1,495	$	3,323	$	25,476
Charge-offs		3		760		105		978		139		-		1,985
Recoveries		35		87		467		689		87		-		1,365
(Release) provision		(367)		(165)		(606)		394		21		(277)		(1,000)
Ending balance	$	1,991	$	13,228	$	1,754	$	2,373	$	1,464	$	3,046	$	23,856

Six months ended June 30, 2014
Beginning balance	$	2,250	$	16,763	$	1,980	$	2,837	$	1,439	$	2,012	$	27,281
Charge-offs		7		1,089		173		1,827		249		-		3,345
Recoveries		50		228		504		939		199		-		1,920
(Release) provision		(302)		(2,674)		(557)		424		75		1,034		(2,000)
Ending balance	$	1,991	$	13,228	$	1,754	$	2,373	$	1,464	$	3,046	$	23,856

Ending balance: Individually evaluated for impairment	$	-	$	803	$	135	$	502	$	-	$	-	$	1,440
Ending balance: Collectively evaluated for impairment	$	1,991	$	12,425	$	1,619	$	1,871	$	1,464	$	3,046	$	22,416

Financing receivables:
Ending balance	$	115,474	$	599,796	$	32,265	$	368,592	$	3,064	$	13,556	$	1,132,747
Ending balance: Individually evaluated for impairment	$	21	$	17,131	$	2,598	$	16,379	$	-	$	-	$	36,129
Ending balance: Collectively evaluated for impairment	$	115,453	$	582,665	$	29,667	$	352,213	$	3,064	$	13,556	$	1,096,618

1 As of June 30, 2014, this segment consisted of performing loans that included a higher risk pool of loans rated as substandard that totaled $3.2 million. The amount of general allocation that was estimated for that portion of these performing substandard rated loans was $78,000 at June 30, 2014.

Changes in the allowance for loan losses by segment of loans based on method of impairment for the three and six months ended June 30, 2013, were as follows:



Allowance for loan losses:			Real Estate		Real Estate		Real Estate
	Commercial		Commercial 1		Construction		Residential		Consumer		Unallocated		Total
Three Months Ended
June 30, 2013
Balance at beginning of period	$	3,773	$	19,265	$	3,729	$	3,971	$	1,214	$	6,682	$	38,634
Charge-offs		25		1,018		894		1,014		134		-		3,085
Recoveries		25		505		480		179		104		-		1,293
(Release) provision		(441)		(655)		(625)		1,885		188		(2,152)		(1,800)
Ending balance	$	3,332	$	18,097	$	2,690	$	5,021	$	1,372	$	4,530	$	35,042

Six Months Ended
June 30, 2013
Balance at beginning of year	$	4,517	$	20,100	$	3,837	$	4,535	$	1,178	$	4,430	$	38,597
Charge-offs		279		1,526		898		1,599		306		-		4,608
Recoveries		44		3,229		1,250		583		247		-		5,353
(Release) provision		(950)		(3,706)		(1,499)		1,502		253		100		(4,300)
Ending balance	$	3,332	$	18,097	$	2,690	$	5,021	$	1,372	$	4,530	$	35,042

Ending balance: Individually evaluated for impairment	$	52	$	1,649	$	324	$	3,011	$	-	$	-	$	5,036
Ending balance: Collectively evaluated for impairment	$	3,280	$	16,448	$	2,366	$	2,010	$	1,372	$	4,530	$	30,006

Financing receivables:
Ending balance	$	98,036	$	563,061	$	34,964	$	386,504	$	2,793	$	17,345	$	1,102,703
Ending balance: Individually evaluated for impairment	$	104	$	32,381	$	8,073	$	29,822	$	-	$	-	$	70,380
Ending balance: Collectively evaluated for impairment	$	97,932	$	530,680	$	26,891	$	356,682	$	2,793	$	17,345	$	1,032,323

1 As of June 30, 2013, this segment consisted of performing loans that included a higher risk pool of loans rated as substandard that totaled $11.1 million. The amount of general allocation that was estimated for that portion of these performing substandard rated loans was $2.9 million at June 30, 2013.