Note 4. Allowance for Loan Losses

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


	September 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	)		(950	)		(59	)		(364	)		(1,420	)
Recoveries		3			90			2			69			213			377
Provision for (recovery of) loan losses		(150	)		(368	)		288			(68	)		198			(100	)

Ending Balance, September 30, 2015	$	1,256		$	879		$	2,998		$	252		$	190		$	5,575


Ending Balance:
Individually evaluated for impairment		132			22			596			—			—			750
Collectively evaluated for impairment		1,124			857			2,402			252			190			4,825

Loans:
Ending Balance		29,935			179,419			165,661			19,950			11,448			406,413

Individually evaluated for impairment		3,081			2,151			3,509			99			—			8,840
Collectively evaluated for impairment		26,854			177,268			162,152			19,851			11,448			397,573


	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


	September 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		(91	)		(259	)		(203	)		(43	)		(251	)		(847	)
Recoveries		79			10			340			16			174			619
Provision for (recovery of) loan losses		(832	)		185			(131	)		(58	)		136			(700	)

Ending Balance, September 30, 2014	$	1,866		$	2,911		$	4,424		$	357		$	158		$	9,716


Ending Balance:
Individually evaluated for impairment		626			133			914			36			—			1,709
Collectively evaluated for impairment		1,240			2,778			3,510			321			158			8,007

Loans:
Ending Balance		29,862			155,298			154,769			22,943			11,818			374,690

Individually evaluated for impairment		3,382			3,436			9,899			126			—			16,843
Collectively evaluated for impairment		26,480			151,862			144,870			22,817			11,818			357,847

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


	September 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	$	3,256	$	2,416	$	665	$	3,081	$	132	$	3,127	$	45
Secured by 1-4 family		2,222		2,129		22		2,151		22		2,687		88
Other real estate loans		3,961		2,000		1,509		3,509		596		5,563		49
Commercial and industrial		111		99		—		99		—		126		—
Consumer and other loans		—		—		—		—		—		—		—

Total	$	9,550	$	6,644	$	2,196	$	8,840	$	750	$	11,503	$	182


	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


	September 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	$	3,588	$	2,129	$	1,253	$	3,382	$	626	$	6,289	$	34
Secured by 1-4 family		4,384		2,686		750		3,436		133		3,200		108
Other real estate loans		10,453		7,499		2,400		9,899		914		10,635		188
Commercial and industrial		131		8		118		126		36		171		1
Consumer and other loans		—		—		—		—		—		—		—

Total	$	18,556	$	12,322	$	4,521	$	16,843	$	1,709	$	20,295	$	331

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 September 30, 2015, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $1.4 million. At September 30, 2015, $321 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 nine month periods ended September 30, 2015 and the three month period ended September 30, 2014. There was one other real estate loan classified as a TDR during the nine month period ended September 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 nine months ended September 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.