ce for credit losses (the “allowance”) is an estimate of probable incurred credit losses inherent in the Company’s loan portfolio that have been incurred as of the balance-sheet date. The allowance is established through a provision for credit losses which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged off credits is recorded as a recovery to the allowance. The overall allowance consists of two primary components, specific reserves related to impaired loans and general reserves for probable incurred losses related to loans that are not impaired.

For all portfolio segments, the determination of the general reserve for loans that are not impaired is based on estimates made by management, including but not limited to, consideration of historical losses by portfolio segment over the most recent 20 quarters, and qualitative factors including economic trends in the Company’s service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the loan portfolio, and probable losses inherent in the portfolio taken as a whole.

The following table shows the summary of activities for the allowance for credit losses as of and for the three months ended March 31, 2014 and 2013 by portfolio segment (in thousands):



	Commercial			Real Estate			Consumer			Unallocated			Total
Allowance for credit losses:
Beginning balance, January 1, 2014	$	2,444		$	5,174		$	1,168		$	422		$	9,208
Provision charged to operations	449			(510		)	237			(176		)	—
Losses charged to allowance	(929		)	—			(85		)	—			(1,014		)
Recoveries	48			8			71			—			127
Ending balance, March 31, 2014	$	2,012		$	4,672		$	1,391		$	246		$	8,321
Allowance for credit losses:
Beginning balance, January 1, 2013	$	2,676		$	5,877		$	1,541		$	39		$	10,133
Provision charged to operations	241			(341		)	(238		)	338			—
Losses charged to allowance	(698		)	—			(17		)	—			(715		)
Recoveries	42			—			29			—			71
Ending balance, March 31, 2013	$	2,261		$	5,536		$	1,315		$	377		$	9,489

The following is a summary of the allowance for credit losses by impairment methodology and portfolio segment as of March 31, 2014 and December 31, 2013 (in thousands).



	Commercial		Real Estate		Consumer		Unallocated		Total
Allowance for credit losses:
Ending balance, March 31, 2014	$	2,012	$	4,672	1,391		$	246	$	8,321
Ending balance: individually evaluated for impairment	$	—	$	308	30		$	—	$	338
Ending balance: collectively evaluated for impairment	$	2,012	$	4,364	1,361		$	246	$	7,983

Ending balance, December 31, 2013	$	2,444	$	5,174	$	1,168	$	422	$	9,208
Ending balance: individually evaluated for impairment	$	469	$	465	$	73	$	—	$	1,007
Ending balance: collectively evaluated for impairment	$	1,975	$	4,709	$	1,095	$	422	$	8,201

The table above excludes ending balance of loans acquired with deteriorated quality of $428,000 and $2,465,000 with no allowance at March 31, 2014 and December 31, 2013, respectively.

The following table shows the ending balances of loans as of March 31, 2014 and December 31, 2013 by portfolio segment and by impairment methodology (in thousands):



	Commercial		Real Estate		Consumer		Total
Loans:
Ending balance, March 31, 2014	$	112,322	$	343,845	$	58,370	$	514,537
Ending balance: individually evaluated for impairment	$	290	$	8,314	$	1,954	$	10,558
Ending balance: collectively evaluated for impairment	$	112,032	$	335,531	$	56,416	$	503,979

Loans:
Ending balance, December 31, 2013	$	118,731	$	333,939	$	59,846	$	512,516
Ending balance: individually evaluated for impairment	$	1,527	$	9,540	$	2,290	$	13,357
Ending balance: collectively evaluated for impairment	$	117,204	$	324,399	$	57,556	$	499,159

The following table shows the loan portfolio by class allocated by management’s internal risk ratings at March 31, 2014 (in thousands):



	Pass		Special Mention		Sub-Standard		Doubtful		Total
Commercial:
Commercial and industrial	$	80,920	$	3,177	$	3,256	$	—	$	87,353
Agricultural land and production	24,969		—		—		—		24,969
Real Estate:
Owner occupied	146,483		5,151		7,709		—		159,343
Real estate construction and other land loans	27,796		2,090		7,195		—		37,081
Commercial real estate	79,350		3,910		7,534		—		90,794
Agricultural real estate	50,126		1,981		—		—		52,107
Other real estate	4,520		—		—		—		4,520
Consumer:
Equity loans and lines of credit	40,458		2,081		4,671		—		47,210
Consumer and installment	10,868		39		253		—		11,160
Total	$	465,490	$	18,429	$	30,618	$	—	$	514,537

The following table shows the loan portfolio by class allocated by management’s internally assigned risk grade ratings at December 31, 2013 (in thousands):



	Pass		Special Mention		Sub-Standard		Doubtful		Total
Commercial:
Commercial and industrial	$	81,732	$	2,244	$	3,106	$	—	$	87,082
Agricultural land and production	31,649		—		—		—		31,649
Real Estate:
Owner occupied	144,082		5,229		7,470		—		156,781
Real estate construction and other land loans	31,776		3,959		6,594		—		42,329
Commercial real estate	77,589		3,718		4,810		—		86,117
Agricultural real estate	42,151		2,013		—		—		44,164
Other real estate	4,548		—		—		—		4,548
Consumer:
Equity loans and lines of credit	41,999		2,400		4,195		—		48,594
Consumer and installment	10,946		46		260		—		11,252
Total	$	466,472	$	19,609	$	26,435	$	—	$	512,516

The following table shows an aging analysis of the loan portfolio by class and the time past due at March 31, 2014 (in thousands):



	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days Accruing		Non-accrual
Commercial:
Commercial and industrial	$	8	$	200	$	—	$	208	$	87,145	$	87,353	$	—	$	291
Agricultural land and production	—		—		—		—		24,969		24,969		—		—
Real estate:	—						—		—		—
Owner occupied	379		482		—		861		158,482		159,343		—		1,191
Real estate construction and other land loans	—		—		—		—		37,081		37,081		—		1,401
Commercial real estate	—		—		—		—		90,794		90,794		—		149
Agricultural real estate	—		—		—		—		52,107		52,107		—		—
Other real estate	—		—		—		—		4,520		4,520		—		—
Consumer:							—		—		—
Equity loans and lines of credit	377		10		—		387		46,823		47,210		—		1,950
Consumer and installment	72		5		—		77		11,083		11,160		—		—
Total	$	836	$	697	$	—	$	1,533	$	513,004	$	514,537	$	—	$	4,982

The following table shows an aging analysis of the loan portfolio by class and the time past due at December 31, 2013 (in thousands):



	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days Accruing		Non- accrual
Commercial:
Commercial and industrial	$	274	$	236	$	—	$	510	$	86,572	$	87,082	$	—	$	1,527
Agricultural land and production	—		—		—		—		31,649		31,649		—		—
Real estate:	—
Owner occupied	1,272		134		418		1,824		154,957		156,781		—		2,161
Real estate construction and other land loans	—		—		—		—		42,329		42,329		—		1,450
Commercial real estate	—		—		—		—		86,117		86,117		—		158
Agricultural real estate	—		—		—		—		44,164		44,164		—		—
Other real estate	—		—		—		—		4,548		4,548		—		—
Consumer:
Equity loans and lines of credit	10		147		252		409		48,185		48,594		—		2,286
Consumer and installment	86		—		—		86		11,166		11,252		—		4
Total	$	1,642	$	517	$	670	$	2,829	$	509,687	$	512,516	$	—	$	7,586

The following table shows information related to impaired loans by class at March 31, 2014 (in thousands):



	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial:
Commercial and industrial	$	290	$	1,332	$	—
Real estate:
Owner occupied	2,561		3,054		—
Real estate construction and other land loans	1,401		2,128		—
Commercial real estate	491		890		—
Total real estate	4,453		6,072		—
Consumer:
Equity loans and lines of credit	1,774		2,417		—
Consumer and installment	4		5		—
Total consumer	1,778		2,422		—
Total with no related allowance recorded	6,521		9,826		—

With an allowance recorded:
Real estate:
Real estate construction and other land loans	3,861		3,861		308
Consumer:
Equity loans and lines of credit	176		180		30
Total with an allowance recorded	4,037		4,041		338
Total	$	10,558	$	13,867	$	338

The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.

The following table shows information related to impaired loans by class at December 31, 2013 (in thousands):



	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial:
Commercial and industrial	$	350	$	385	$	—
Real estate:
Owner occupied	3,160		4,159		—
Real estate construction and other land loans	1,449		2,136		—
Commercial real estate	502		891		—
Total real estate	5,111		7,186		—
Consumer:
Equity loans and lines of credit	2,029		2,826		—
Consumer and installment	4		5		—
Total consumer	2,033		2,831		—
Total with no related allowance recorded	7,494		10,402		—

With an allowance recorded:
Commercial:
Commercial and industrial	1,177		1,222		469
Real estate:
Owner occupied	385		425		3
Real estate construction and other land loans	4,044		4,044		462
Total real estate	4,429		4,469		465
Consumer:
Equity loans and lines of credit	257		264		73
Total with an allowance recorded	5,863		5,955		1,007
Total	$	13,357	$	16,357	$	1,007

The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.

The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2014 and 2013.



	Three Months Ended March 31, 2014				Three Months Ended March 31, 2013
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	329	$	—	$	558	$	—
Real estate:
Owner occupied	3,195		20		835		—
Real estate construction and other land loans	1,427		—		5,007		—
Commercial real estate	496		—		26		—
Total real estate	5,118		20		5,868		—
Consumer:
Equity loans and lines of credit	1,943		—		1,691		—
Consumer and installment	4		—		—		—
Total consumer	1,947		—		1,691		—
Total with no related allowance recorded	7,394		20		8,117		—

With an allowance recorded:
Commercial:
Commercial and industrial	872		—		1,821		33
Real estate:
Owner occupied	96		—		747		—
Real estate construction and other land loans	3,988		70		6,480		86
Total real estate	4,084		70		7,227		86
Consumer:
Equity loans and lines of credit	236		—		223		—
Total with an allowance recorded	5,192		70		9,288		119
Total	$	12,586	$	90	$	17,405	$	119

Foregone interest on nonaccrual loans totaled $164,000 and $176,000 for the three month periods ended March 31, 2014 and 2013, respectively.

Troubled Debt Restructurings:

As of March 31, 2014 and December 31, 2013, the Company has a recorded investment in troubled debt restructurings of $9,094,000 and $10,366,000, respectively. The Company has allocated $308,000 and 946,000 of specific reserves to loans whose terms have been modified in troubled debt restructurings as of March 31, 2014 and December 31, 2013, respectively. The Company has committed to lend no additional amounts as of March 31, 2014 to customers with outstanding loans that are classified as troubled debt restructurings.

During the three month periods ended March 31, 2014 and 2013 no loans were modified as troubled debt restructurings.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no defaults on troubled debt restructurings, within twelve months following the modification, during the quarter ended March 31, 2014 and March 31, 2013.