Note 4.

Allowance for Loan Losses

Transactions in the allowance for loan losses for the three months ended March 31, 2012 and 2011 and for the year ended December 31, 2011 were as follows:


	(in thousands)
	March 31, 2012			December 31, 2011			March 31, 2011
Balance at beginning of year	$	12,937		$	16,036		$	16,036
Provision charged to operating expense		2,000			12,380			270
Loan recoveries		125			310			87
Loan charge-offs		(1,426	)		(15,789	)		(3,225	)

Balance at end of period	$	13,636		$	12,937		$	13,168

The following tables present, as of March 31, 2012 and December 31, 2011, the total allowance for loan losses, the allowance by impairment methodology and loans by impairment methodology.


	March 31, 2012 (in thousands)
	Commercial and Industrial			Other Real Estate			Construction and Land Development			Secured by 1-4 Family Residential			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2011	$	963		$	5,192		$	2,843		$	3,766		$	173		$	12,937
Charge-offs		—			(503	)		(369	)		(481	)		(73	)		(1,426	)
Recoveries		5			52			—			2			66			125
Provision for loan losses		(170	)		649			679			854			(12	)		2,000

Ending Balance, March 31, 2012	$	798		$	5,390		$	3,153		$	4,141		$	154		$	13,636


Ending Balance:
Individually evaluated for impairment		134			574			1,062			1,041			—			2,811
Collectively evaluated for impairment		664			4,816			2,091			3,100			154			10,825

Loans:
Ending Balance		29,449			175,738			49,893			125,628			9,686			390,394

Individually evaluated for impairment		481			9,453			5,742			5,946			—			21,622
Collectively evaluated for impairment		28,968			166,285			44,151			119,682			9,686			368,772


	December 31, 2011 (in thousands)
	Commercial and Industrial			Other Real Estate			Construction and Land Development			Secured by 1-4 Family Residential			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2010	$	858		$	9,187		$	4,050		$	1,681		$	260		$	16,036
Charge-offs		(348	)		(7,551	)		(2,983	)		(4,639	)		(268	)		(15,789	)
Recoveries		3			—			50			6			251			310
Provision for loan losses		450			3,556			1,726			6,718			(70	)		12,380

Ending Balance, December 31, 2011	$	963		$	5,192		$	2,843		$	3,766		$	173		$	12,937


Ending Balance:
Individually evaluated for impairment		309			351			930			848			—			2,438
Collectively evaluated for impairment		654			4,841			1,913			2,918			173			10,499

Loans:
Ending Balance		29,446			181,141			48,363			122,339			11,151			392,440

Individually evaluated for impairment		480			10,940			7,640			6,860			—			25,920
Collectively evaluated for impairment		28,966			170,201			40,723			115,479			11,151			366,520

Impaired loans and the related allowance at March 31, 2012 and December 31, 2011, were as follows:

		0000000		0000000		0000000		0000000		0000000		0000000		0000000
	March 31, 2012 (in thousands)
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
Real estate loans:
Construction	$	6,118	$	634	$	5,108	$	5,742	$	1,062	$	5,571	$	82
Secured by 1-4 family		7,060		1,507		4,439		5,946		1,041		4,488		55
Other real estate loans		13,963		7,480		1,973		9,453		574		10,879		30
Commercial and industrial		481		—		481		481		134		480		5
Consumer and other loans		—		—		—		—		—		—		—

Total	$	27,622	$	9,621	$	12,001	$	21,622	$	2,811	$	21,418	$	172

		0000000		0000000		0000000		0000000		0000000		0000000		0000000
	December 31, 2011 (in thousands)
	Unpaid Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		Average Recorded Investment		Interest Income Recognized
Real estate loans:
Construction and land development	$	8,106	$	3,531	$	4,109	$	7,640	$	930	$	7,077	$	367
Secured by 1-4 family		8,566		3,495		3,365		6,860		848		6,519		301
Other real estate loans		15,165		8,135		2,805		10,940		351		23,918		396
Commercial and industrial		480		—		480		480		309		660		27
Consumer and other loans		—		—		—		—		—		—		—

Total	$	32,317	$	15,161	$	10,758	$	25,920	$	2,438	$	38,174	$	1,091

The "Recorded Investment" amounts in the table above represent the outstanding principal balance on each loan represented in the table. The "Unpaid Principal Balance" represents the outstanding principal balance on each loan represented in the table plus any amounts that have been charged off on each loan and/or payments that have been applied towards principal on non-accrual loans.

As of March 31, 2012, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $5.4 million. At March 31, 2012, $1.4 million of the loans classified as TDRs were performing under the restructured terms and were not considered non-performing assets. There were $11.4 million in TDRs at December 31, 2011. There were no new loans modified under TDRs during the three month period ended March 31, 2012. There were no TDRs that defaulted during the three month period ended March 31, 2012.