ce for credit losses (the “Allowance”) is a valuation allowance for probable incurred credit losses in the Company’s loan portfolio. 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 (and in certain cases peer data) 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 as of and for the three months ended September 30, 2015 and 2014 by portfolio segment (in thousands):



	Commercial			Real Estate			Consumer			Unallocated			Total
Allowance for credit losses:
Beginning balance, July 1, 2015	$	3,553		$	4,429		$	732		$	—		$	8,714
Provision charged to operations	(186		)	154			27			105			100
Losses charged to allowance	(11		)	—			(22		)	—			(33		)
Recoveries	267			8			37			—			312
Ending balance, September 30, 2015	$	3,623		$	4,591		$	774		$	105		$	9,093

Allowance for credit losses:
Beginning balance, July 1, 2014	$	1,874		$	4,157		$	981		$	295		$	7,307
Provision charged to operations	243			(121		)	(85		)	(37		)	—
Losses charged to allowance	(1		)	—			(57		)	—			(58		)
Recoveries	41			159			40			—			240
Ending balance, September 30, 2014	$	2,157		$	4,195		$	879		$	258		$	7,489

The following table shows the summary of activities for the allowance for loan losses as of and for the nine months ended September 30, 2015 and 2014 by portfolio segment of loans (in thousands):



	Commercial			Real Estate			Consumer			Unallocated			Total
Allowance for credit losses:
Beginning balance, January 1, 2015	$	3,130		$	4,058		$	1,078		$	42		$	8,308
Provision charged to operations	731			509			(703		)	63			600
Losses charged to allowance	(708		)	—			(95		)	—			(803		)
Recoveries	470			24			494			—			988
Ending balance, September 30, 2015	$	3,623		$	4,591		$	774		$	105		$	9,093
Allowance for credit losses:
Beginning balance, January 1, 2014	$	2,444		$	5,174		$	1,168		$	422		$	9,208
Provision charged to operations	768			(970		)	(34		)	(164		)	(400		)
Losses charged to allowance	(1,195		)	(183		)	(467		)	—			(1,845		)
Recoveries	140			174			212			—			526
Ending balance, September 30, 2014	$	2,157		$	4,195		$	879		$	258		$	7,489

The following is a summary of the Allowance by impairment methodology and portfolio segment as of September 30, 2015 and December 31, 2014 (in thousands):



	Commercial		Real Estate		Consumer		Unallocated		Total
Allowance for credit losses:
Ending balance, September 30, 2015	$	3,623	$	4,591	774		$	105	$	9,093
Ending balance: individually evaluated for impairment	$	10	$	145	36		$	—	$	191
Ending balance: collectively evaluated for impairment	$	3,613	$	4,446	738		$	105	$	8,902

Ending balance, December 31, 2014	$	3,130	$	4,058	$	1,078	$	42	$	8,308
Ending balance: individually evaluated for impairment	$	230	$	162	$	220	$	—	$	612
Ending balance: collectively evaluated for impairment	$	2,900	$	3,896	$	858	$	42	$	7,696

The following table shows the ending balances of loans as of September 30, 2015 and December 31, 2014 by portfolio segment and by impairment methodology (in thousands):



	Commercial		Real Estate		Consumer		Total
Loans:
Ending balance, September 30, 2015	$	146,111	$	401,735	$	51,187	$	599,033
Ending balance: individually evaluated for impairment	$	55	$	5,294	$	1,498	$	6,847
Ending balance: collectively evaluated for impairment	$	146,056	$	396,441	$	49,689	$	592,186

Loans:
Ending balance, December 31, 2014	$	128,147	$	386,627	$	57,668	$	572,442
Ending balance: individually evaluated for impairment	$	7,268	$	8,512	$	3,046	$	18,826
Ending balance: collectively evaluated for impairment	$	120,879	$	378,115	$	54,622	$	553,616

The following table shows the loan portfolio by class allocated by management’s internal risk ratings at September 30, 2015 (in thousands):



	Pass		Special Mention		Sub-Standard		Doubtful		Total
Commercial:
Commercial and industrial	$	93,454	$	9,343	$	1,770	$	—	$	104,567
Agricultural land and production	29,794		11,750		—		—		41,544
Real Estate:
Owner occupied	164,316		4,481		1,580		—		170,377
Real estate construction and other land loans	30,829		2,202		3,179		—		36,210
Commercial real estate	108,437		3,720		4,774		—		116,931
Agricultural real estate	58,253		12,232		—		—		70,485
Other real estate	7,732		—		—		—		7,732
Consumer:
Equity loans and lines of credit	38,947		459		1,992		—		41,398
Consumer and installment	9,772		—		17		—		9,789
Total	$	541,534	$	44,187	$	13,312	$	—	$	599,033

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



	Pass		Special Mention		Sub-Standard		Doubtful		Total
Commercial:
Commercial and industrial	$	78,333	$	2,345	$	8,329	$	—	$	89,007
Agricultural land and production	39,140		—		—		—		39,140
Real Estate:
Owner occupied	170,568		2,778		3,458		—		176,804
Real estate construction and other land loans	32,114		1,130		5,679		—		38,923
Commercial real estate	95,831		215		10,742		—		106,788
Agricultural real estate	55,018		2,123		360		—		57,501
Other real estate	6,611		—		—		—		6,611
Consumer:
Equity loans and lines of credit	42,334		72		5,169		—		47,575
Consumer and installment	10,072		—		21		—		10,093
Total	$	530,021	$	8,663	$	33,758	$	—	$	572,442

The following table shows an aging analysis of the loan portfolio by class and the time past due at September 30, 2015 (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	$	—	$	—	$	18	$	18	$	104,549	$	104,567	$	—	$	55
Agricultural land and production	—		—		—		—		41,544		41,544		—		—
Real estate:	—						—		—		—
Owner occupied	—		—		—		—		170,377		170,377		—		358
Real estate construction and other land loans	—		—		—		—		36,210		36,210		—		—
Commercial real estate	—		—		—		—		116,931		116,931		—		583
Agricultural real estate	—		—		—		—		70,485		70,485		—		—
Other real estate	—		—		—		—		7,732		7,732		—		—
Consumer:							—		—		—
Equity loans and lines of credit	—		—		1,266		1,266		40,132		41,398		—		1,484
Consumer and installment	36		15		—		51		9,738		9,789		—		14
Total	$	36	$	15	$	1,284	$	1,335	$	597,698	$	599,033	$	—	$	2,494

The following table shows an aging analysis of the loan portfolio by class and the time past due at December 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	$	172	$	88	$	—	$	260	$	88,747	$	89,007	$	—	$	7,265
Agricultural land and production	—		—		—		—		39,140		39,140		—		—
Real estate:	—
Owner occupied	164		—		249		413		176,391		176,804		—		1,363
Real estate construction and other land loans	547		—		—		547		38,376		38,923		—		547
Commercial real estate	—		—		—		—		106,788		106,788		—		1,468
Agricultural real estate	—		—		—		—		57,501		57,501		—		360
Other real estate	—		—		—		—		6,611		6,611		—		—
Consumer:
Equity loans and lines of credit	—		—		227		227		47,348		47,575		—		3,030
Consumer and installment	30		—		—		30		10,063		10,093		—		19
Total	$	913	$	88	$	476	$	1,477	$	570,965	$	572,442	$	—	$	14,052

The following table shows information related to impaired loans by class at September 30, 2015 (in thousands):



	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial:
Commercial and industrial	$	3	$	5	$	—
Real estate:
Owner occupied	173		246		—
Real estate construction and other land loans	—		—		—
Commercial real estate	1,174		1,314		—
Agricultural real estate	—		—		—
Total real estate	1,347		1,560		—
Consumer:
Equity loans and lines of credit	1,276		1,951		—
Total with no related allowance recorded	2,626		3,516		—

With an allowance recorded:
Commercial:
Commercial and industrial	52		55		10
Real estate:
Owner occupied	185		214		21
Real estate construction and other land loans	3,179		3,179		5
Commercial real estate	583		598		119
Total real estate	3,947		3,991		145
Consumer:
Equity loans and lines of credit	208		222		35
Consumer and installment	14		17		1
Total consumer	222		239		36
Total with an allowance recorded	4,221		4,285		191
Total	$	6,847	$	7,801	$	191

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, 2014 (in thousands):



	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial:
Commercial and industrial	$	6,440	$	9,991	$	—
Agricultural land and production	—		1,722		—
Total commercial	6,440		11,713		—
Real estate:
Owner occupied	1,188		1,255		—
Real estate construction and other land loans	547		799		—
Commercial real estate	1,794		1,794		—
Agricultural real estate	360		360		—
Total real estate	3,889		4,208		—
Consumer:
Equity loans and lines of credit	2,019		2,707		—
Consumer and installment	—		—		—
Total consumer	2,019		2,707		—
Total with no related allowance recorded	12,348		18,628		—

With an allowance recorded:
Commercial:
Commercial and industrial	828		835		230
Real estate:
Owner occupied	199		219		30
Real estate construction and other land loans	3,542		3,542		72
Commercial real estate	882		1,022		60
Total real estate	4,623		4,783		162
Consumer:
Equity loans and lines of credit	1,008		1,026		217
Consumer and installment	19		21		3
Total consumer	1,027		1,047		220
Total with an allowance recorded	6,478		6,665		612
Total	$	18,826	$	25,293	$	612

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 September 30, 2015 and 2014.



	Three Months Ended September 30, 2015				Three Months Ended September 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	143	$	—	$	20	$	—
Real estate:
Owner occupied	556		—		1,227		14
Real estate construction and other land loans	1,064		57		1,335		18
Commercial real estate	2,020		—		377		—
Agricultural real estate	72		—		—		—
Total real estate	3,712		57		2,939		32
Consumer:
Equity loans and lines of credit	1,595		—		1,652		—
Consumer and installment	—		—		8		—
Total consumer	1,595		—		1,660		—
Total with no related allowance recorded	5,450		57		4,619		32

With an allowance recorded:
Commercial:
Commercial and industrial	55		—		8		—
Real estate:
Owner occupied	187		—		816		—
Real estate construction and other land loans	2,123		—		3,687		66
Commercial real estate	660		20		43		—
Total real estate	2,970		20		4,546		66
Consumer:
Equity loans and lines of credit	209		—		314		—
Consumer and installment	14		—		14		—
Total consumer	223		—		328		—
Total with an allowance recorded	3,248		20		4,882		66
Total	$	8,698	$	77	$	9,501	$	98

The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the nine months ended September 30, 2015 and 2014.



	Nine Months Ended September 30, 2015				Nine Months Ended September 30, 2014
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial:
Commercial and industrial	$	3,797	$	—	$	184	$	—
Agricultural land and production	—		—		—		—
Total commercial	3,797		—		184		—
Real estate:
Owner occupied	950		—		2,406		41
Real estate construction and other land loans	706		175		1,345		18
Commercial real estate	2,171		—		501		—
Agricultural real estate	274		—		—		—
Other real estate	—		—		—		—
Total real estate	4,101		175		4,252		59
Consumer:
Equity loans and lines of credit	2,032		—		1,837		—
Consumer and installment	—		—		11		—
Total consumer	2,032		—		1,848		—
Total with no related allowance recorded	9,930		175		6,284		59

With an allowance recorded:
Commercial:
Commercial and industrial	307		—		351		—
Agricultural land and production	—		—		—		—
Total commercial	307		—		351		—
Real estate:
Owner occupied	193		—		283		—
Real estate construction and other land loans	2,986		—		3,852		204
Commercial real estate	807		59		13		—
Agricultural real estate	—		—		—		—
Other real estate	—		—		—		—
Total real estate	3,986		59		4,148		204
Consumer:
Equity loans and lines of credit	373		—		251		—
Consumer and installment	17		—		29		—
Total consumer	390		—		280		—
Total with an allowance recorded	4,683		59		4,779		204
Total	$	14,613	$	234	$	11,063	$	263

Foregone interest on nonaccrual loans totaled $366,000 and $270,000 for the nine month periods ended September 30, 2015 and 2014, respectively. For the three month periods ended September 30, 2015 and 2014, foregone interest on nonaccrual loans totaled $91,000 and $95,000, respectively.

Troubled Debt Restructurings:

As of September 30, 2015 and December 31, 2014, the Company has a recorded investment in troubled debt restructurings of $5,676,000 and $6,600,000, respectively. The Company has allocated $6,000 and $132,000 of specific reserves to loans whose terms have been modified in troubled debt restructurings as of September 30, 2015 and December 31, 2014, respectively. The Company has committed to lend no additional amounts as of September 30, 2015 to customers with outstanding loans that are classified as troubled debt restructurings.

During the nine month period ended September 30, 2015 two loans were modified as a troubled debt restructuring. The modification of the terms of such loan included one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. During the same period, there were no troubled debt restructurings in which the amount of principal or accrued interest owed from the borrower was forgiven. During the three months ended September 30, 2015 and September 30, 2014, no loans were modified as troubled debt restructurings.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended September 30, 2015 (in thousands):



Troubled Debt Restructurings:	Number of Loans	Pre-Modification Outstanding Recorded Investment (1)		Principal Modification (2)		Post Modification Outstanding Recorded Investment (3)		Outstanding Recorded Investment
Commercial and Industrial	2	$	42	$	—	$	42	$	34


(1)	Amounts represent the recorded investment in loans before recognizing effects of the TDR, if any.


(2)	Principal Modification includes principal forgiveness at the time of modification, contingent principal forgiveness granted over the life of the loan based on borrower performance, and principal that has been legally separated and deferred to the end of the loan, with zero percent contractual interest rate.


(3)	Balance outstanding after principal modification, if any borrower reduction to recorded investment.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended September 30, 2014 (in thousands):



Troubled Debt Restructurings:	Number of Loans	Pre-Modification Outstanding Recorded Investment (1)		Principal Modification (2)		Post Modification Outstanding Recorded Investment (3)		Outstanding Recorded Investment
Equity loans and lines of credit	1	$	7	$	—	$	7	$	4

During the three months ended September 30, 2015 and 2014 no loans were modified as troubled debt restructuring.

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 nine months ended September 30, 2015 or September 30, 2014.