Note 4. Allowance for Loan Losses

The following tables present, as of June 30, 2015, December 31, 2014 and June 30, 2014, the total allowance for loan losses, the allowance by impairment methodology and loans by impairment methodology (in thousands):


	June 30, 2015
	Construction and Land Development		Secured by 1-4 Family Residential			Other Real Estate			Commercial and Industrial			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2014	$	1,403	$	1,204		$	3,658		$	310		$	143		$	6,718
Charge-offs		—		(47	)		(471	)		(59	)		(206	)		(783	)
Recoveries		2		83			1			62			146			294
Provision for (recovery of) loan losses		204		(314	)		(16	)		(55	)		81			(100	)

Ending Balance, June 30, 2015	$	1,609	$	926		$	3,172		$	258		$	164		$	6,129


Ending Balance:
Individually evaluated for impairment		437		79			1,025			22			—			1,563
Collectively evaluated for impairment		1,172		847			2,147			236			164			4,566

Loans:
Ending Balance		32,009		173,265			155,396			19,319			11,732			391,721

Individually evaluated for impairment		3,319		2,387			4,944			120			—			10,770
Collectively evaluated for impairment		28,690		170,878			150,452			19,199			11,732			380,951


	December 31, 2014
	Construction and Land Development			Secured by 1-4 Family Residential			Other Real Estate			Commercial and Industrial			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2013	$	2,710		$	2,975		$	4,418		$	442		$	99		$	10,644
Charge-offs		(91	)		(272	)		(203	)		(43	)		(318	)		(927	)
Recoveries		80			15			509			18			229			851
Provision for (recovery of) loan losses		(1,296	)		(1,514	)		(1,066	)		(107	)		133			(3,850	)

Ending Balance, December 31, 2014	$	1,403		$	1,204		$	3,658		$	310		$	143		$	6,718


Ending Balance:
Individually evaluated for impairment		245			173			1,456			33			—			1,907
Collectively evaluated for impairment		1,158			1,031			2,202			277			143			4,811

Loans:
Ending Balance		29,475			163,727			151,802			21,166			12,240			378,410

Individually evaluated for impairment		3,205			3,414			7,183			120			—			13,922
Collectively evaluated for impairment		26,270			160,313			144,619			21,046			12,240			364,488


	June 30, 2014
	Construction and Land Development			Secured by 1-4 Family Residential			Other Real Estate			Commercial and Industrial			Consumer and Other Loans			Total
Allowance for loan losses:
Beginning Balance, December 31, 2013	$	2,710		$	2,975		$	4,418		$	442		$	99		$	10,644
Charge-offs		—			(104	)		(203	)		(36	)		(202	)		(545	)
Recoveries		40			7			339			3			118			507
Provision for (recovery of) loan losses		(636	)		18			(167	)		65			120			(600	)

Ending Balance, June 30, 2014	$	2,114		$	2,896		$	4,387		$	474		$	135		$	10,006


Ending Balance:
Individually evaluated for impairment		779			126			911			57			—			1,873
Collectively evaluated for impairment		1,335			2,770			3,476			417			135			8,133

Loans:
Ending Balance		32,795			151,043			146,483			24,797			12,372			367,490

Individually evaluated for impairment		6,427			3,297			9,994			164			—			19,882
Collectively evaluated for impairment		26,368			147,746			136,489			24,633			12,372			347,608

Impaired loans and the related allowance at June 30, 2015, December 31, 2014 and June 30, 2014, were as follows (in thousands):


	June 30, 2015
	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	$	3,464	$	2,684	$	635	$	3,319	$	437	$	3,165	$	31
Secured by 1-4 family		2,476		2,155		232		2,387		79		2,864		57
Other real estate loans		5,416		2,453		2,491		4,944		1,025		6,828		34
Commercial and industrial		130		16		104		120		22		137		2
Consumer and other loans		—		—		—		—		—		—		—

Total	$	11,486	$	7,308	$	3,462	$	10,770	$	1,563	$	12,994	$	124


	December 31, 2014
	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	$	3,299	$	2,800	$	405	$	3,205	$	245	$	5,532	$	40
Secured by 1-4 family		4,327		2,526		888		3,414		173		3,433		138
Other real estate loans		7,623		3,708		3,475		7,183		1,456		10,115		206
Commercial and industrial		127		5		115		120		33		159		1
Consumer and other loans		—		—		—		—		—		—		—

Total	$	15,376	$	9,039	$	4,883	$	13,922	$	1,907	$	19,239	$	385


	June 30, 2014
	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	$	8,746	$	4,022	$	2,405	$	6,427	$	779	$	6,607	$	21
Secured by 1-4 family		4,230		2,766		531		3,297		126		3,248		62
Other real estate loans		10,501		7,347		2,647		9,994		911		10,998		125
Commercial and industrial		170		11		153		164		57		185		1
Consumer and other loans		—		—		—		—		—		—		—

Total	$	23,647	$	14,146	$	5,736	$	19,882	$	1,873	$	21,038	$	209

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 June 30, 2015, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $1.6 million. At June 30, 2015, $324 thousand of the loans classified as TDRs were performing under the restructured terms and were not considered non-performing assets. There were $1.9 million in TDRs at December 31, 2014, $790 thousand of which were performing under the restructured terms. Modified terms under TDRs may include rate reductions, extension of terms that are considered to be below market, conversion to interest only, and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. There were no loans modified under TDRs during the three and six month periods ended June 30, 2015 and the three month period ended June 30, 2014. There was one other real estate loan classified as a TDR during the six month period ended June 30, 2014 because the loan term was extended at a below market rate of interest. The recorded investment for this loan prior to the modification totaled $283 thousand and the recorded investment after the modification totaled $344 thousand.

For the three and six months ended June 30, 2015 and 2014, there were no troubled debt restructurings that subsequently defaulted within twelve months of the loan modification. Management defines default as over ninety days past due or the foreclosure and repossession of the collateral and charge-off of the loan during the twelve month period subsequent to the modification.