Note 4. Allowance for Loan Losses

The following tables present, as of December 31, 2016 and 2015, the total allowance for loan losses, the allowance by impairment methodology and loans by impairment methodology (in thousands).


	December 31, 2016
	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, 2015	$	1,532		$	939		$	2,534		$	306	$	213		$	5,524
Charge-offs		—			(83	)		(165	)		—		(540	)		(788	)
Recoveries		4			293			2			11		275			585
Provision for (recovery of) loan losses		(1,095	)		(130	)		771			63		391			—

Ending Balance, December 31, 2016	$	441		$	1,019		$	3,142		$	380	$	339		$	5,321


Ending Balance:
Individually evaluated for impairment		—			37			—			—		—			37
Collectively evaluated for impairment		441			982			3,142			380		339			5,284

Loans:
Ending Balance		34,699			198,763			211,210			29,981		11,414			486,067

Individually evaluated for impairment		1,973			1,828			984			75		—			4,860
Collectively evaluated for impairment		32,726			196,935			210,226			29,906		11,414			481,207


	December 31, 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		—		(142	)		(1,125	)		(59	)		(512	)		(1,838	)
Recoveries		4		373			2			72			293			744
Provision for (recovery of) loan losses		125		(496	)		(1	)		(17	)		289			(100	)

Ending Balance, December 31, 2015	$	1,532	$	939		$	2,534		$	306		$	213		$	5,524


Ending Balance:
Individually evaluated for impairment		326		23			195			—			—			544
Collectively evaluated for impairment		1,206		916			2,339			306			213			4,980

Loans:
Ending Balance		33,135		189,286			181,447			24,048			11,083			438,999

Individually evaluated for impairment		2,544		2,044			3,023			94			—			7,705
Collectively evaluated for impairment		30,591		187,242			178,424			23,954			11,083			431,294

Impaired loans and the related allowance at December 31, 2016 and 2015, were as follows (in thousands):


	December 31, 2016
	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	$	2,388	$	1,973	$	—	$	1,973	$	—	$	2,407	$	66
Secured by 1-4 family		1,851		1,675		153		1,828		37		2,013		87
Other real estate loans		1,213		984		—		984		—		2,529		22
Commercial and industrial		93		75		—		75		—		85		1
Consumer and other loans		—		—		—		—		—		—		—

Total	$	5,545	$	4,707	$	153	$	4,860	$	37	$	7,034	$	176


	December 31, 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	$	2,741	$	2,206	$	338	$	2,544	$	326	$	2,967	$	60
Secured by 1-4 family		2,116		2,021		23		2,044		23		2,526		107
Other real estate loans		3,492		2,463		560		3,023		195		4,933		58
Commercial and industrial		107		94		—		94		—		118		—
Consumer and other loans		—		—		—		—		—		—		—

Total	$	8,456	$	6,784	$	921	$	7,705	$	544	$	10,544	$	225

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 December 31, 2016, loans classified as troubled debt restructurings (TDRs) and included in impaired loans in the disclosure above totaled $460 thousand. At December 31, 2016, $300 thousand of the loans classified as TDRs were performing under the restructured terms and were not considered non-performing assets. There were $982 thousand in TDRs at December 31, 2015, $317 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 was one loan secured by 1-4 family residential real estate classified as a TDR during the year ended December 31, 2016 because principal was forgiven as part of the loan modification. The recorded investment for this loan prior to modification totaled $138 thousand and the recorded investment after the modification totaled $88 thousand. There were no loans modified under TDRs during the year ended December 31, 2015. The following table provides further information regarding loans modified under TDRs during the year ended December 31, 2016 (dollars in thousands):


	For the year ended December 31, 2016
	Number of Contracts		Pre- modification outstanding recorded investment		Post- modification outstanding recorded investment
Real estate loans:
Construction		—	$	—	$	—
Secured by 1-4 family		1		138		88
Other real estate loans		—		—		—
Commercial and industrial		—		—		—
Consumer and other loans		—		—		—

Total		1	$	138	$	88

The troubled debt restructuring described above increased the allowance for loan losses by $32 thousand and resulted in a charge-off of $50 thousand during the year ended December 31, 2016.

For the years ended December 31, 2016 and 2015, 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 or charge-off of the loan during the twelve month period subsequent to the modification.

There were no non-accrual loans excluded from impaired loan disclosure at December 31, 2016 and December 31, 2015. Had non-accrual loans performed in accordance with their original contract terms, the Company would have recognized additional interest income in the amount of $107 thousand and $243 thousand during the years ended December 31, 2016 and 2015, respectively.