6.	LOANS AND ALLOWANCE FOR LOAN LOSSES

Portfolio Segments

The Company has divided the loan portfolio into eight portfolio segments, each with different risk characteristics described as follows:

Construction, land development and other land loans

– Commercial construction, land and land development loans include loans for the development of residential housing projects, loans for the development of commercial and industrial use property and loans for the purchase and improvement of raw land. These loans are secured in whole or in part by the underlying real estate collateral and are generally guaranteed by the principals of the borrowing entity.

Secured by 1-4 family residential properties

– These loans include conventional mortgage loans on one-to-four family residential properties. These properties may serve as the borrower’s primary residence, vacation home or investment property. Also included in this portfolio are home equity loans and lines of credit. This type of lending, which is secured by a first or second mortgage on the borrower’s residence, allows customers to borrow against the equity in their home.

Secured by multi-family residential properties

– This portfolio segment includes mortgage loans secured by apartment buildings.

Secured by non-farm, non-residential properties

– This portfolio segment includes real estate loans secured by commercial and industrial properties, office or mixed-use facilities, strip shopping centers or other commercial property. These loans are generally guaranteed by the principals of the borrowing entity.

Other real estate loans

– Other real estate loans are loans primarily for agricultural production, secured by mortgages on farmland.

Commercial and industrial loans

– This portfolio segment includes loans to commercial customers for use in the normal course of business. These credits may be loans and lines of credit to financially strong borrowers, secured by inventories, equipment or receivables, and are generally guaranteed by the principals of the borrowing entity.

Consumer loans

– This portfolio segment includes a variety of secured and unsecured personal loans, including automobile loans, loans for household and personal purposes and all other direct consumer installment loans.

Other loans

– Other loans include credit cards, overdrawn checking accounts reclassified to loans and overdraft lines of credit.

As of

March 31, 2016 and December 31, 2015, the composition of the loan portfolio by reporting segment and portfolio segment was as follows:

	March 31 , 201 6
	FUSB		ALC		Total
	(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans	$	18,023	$	—	$	18,023
Secured by 1-4 family residential properties		30,623		16,265		46,888
Secured by multi-family residential properties		11,580		—		11,580
Secured by non-farm, non-residential properties		82,754		—		82,754
Other		168		—		168
Commercial and industrial loans		34,568		—		34,568
Consumer loans		6,614		74,669		81,283
Other loans		407		—		407
Total loans		184,737		90,934		275,671
Less: Unearned interest, fees and deferred cost		174		8,147		8,321
Allowance for loan losses		1,068		2,307		3,375
Net loans	$	183,495	$	80,480	$	263,975

	December 31, 201 5
	FUSB		ALC		Total
	(Dollars in Thousands)
Real estate loans:
Construction, land development and other land loans	$	11,827	$	—	$	11,827
Secured by 1-4 family residential properties		30,730		17,233		47,963
Secured by multi-family residential properties		11,845		—		11,845
Secured by non-farm, non-residential properties		83,883		—		83,883
Other		115		—		115
Commercial and industrial loans		29,377		—		29,377
Consumer loans		7,057		76,131		83,188
Other loans		379		—		379
Total loans		175,213		93,364		268,577
Less: Unearned interest, fees and deferred cost		149		9,215		9,364
Allowance for loan losses		1,329		2,452		3,781
Net loans	$	173,735	$	81,697	$	255,432

The Company makes commercial, real estate and installment loans to its customers. Although the Company has a diversified loan portfolio,

57.8% and 58.0% of the portfolio was concentrated in loans secured by real estate located primarily within a single geographic region of the United States as of March 31, 2016 and December 31, 2015, respectively.

Related Party Loans:

In the ordinary course of business, the Bank makes loans to certain officers and directors of the Company, including companies with which they are associated. These loans are made on the same terms as those prevailing for comparable transactions with

non-related parties. Management believes that such loans do not represent more than a normal risk of collectability, nor do they present other unfavorable features. The aggregate balances of such related party loans and commitments as of both March 31, 2016 and December 31, 2015 were $2.9 million. During the three months ended March 31, 2016, there were no new loans to these parties, and repayments by active related parties were $36 thousand. During the year ended December 31, 2015, there were no new loans to these related parties, and repayments by active related parties were $0.2 million.

Allowance for Loan Losses:

The following tables present changes in the allowance for loan losses by loan portfolio segment and loan type as of

March 31, 2016 and December 31, 2015:

	FUSB
	Three M onths Ended March 31 , 201 6
	Commercial		Commercial Real Estate			Consumer			Residential Real Estate		Other			Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	133	$	1,118		$	28		$	36	$	14		$	1,329
Charge-offs		—		—			(21	)		—		—			(21	)
Recoveries		12		—			23			5		—			40
Provision		107		(487	)		(8	)		117		(9	)		(280	)
Ending balance		252		631			22			158		5			1,068
Ending balance individually evaluated for impairment		72		220			—			—		—			292
Ending balance collectively evaluated for impairment	$	180	$	411		$	22		$	158	$	5		$	776
Loan receivables:
Ending balance		34,568		112,525			6,614			30,623		407			184,737
Ending balance individually evaluated for impairment		436		2,224			—			—		—			2,660
Ending balance collectively evaluated for impairment	$	34,132	$	110,301		$	6,614		$	30,623	$	407		$	182,077

	ALC
	Three Months Ended March 31 , 201 6
	Commercial		Commercial Real Estate		Consumer			Residential Real Estate			Other		Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	—	$	—	$	2,202		$	250		$	—	$	2,452
Charge-offs		—		—		(765	)		(5	)		—		(770	)
Recoveries		—		—		174			4			—		178
Provision		—		—		500			(53	)		—		447
Ending balance		—		—		2,111			196			—		2,307
Ending balance individually evaluated for impairment		—		—		—			—			—		—
Ending balance collectively evaluated for impairment	$	—	$	—	$	2,111		$	196		$	—	$	2,307
Loan receivables:
Ending balance		—		—		74,669			16,265			—		90,934
Ending balance individually evaluated for impairment		—		—		—			—			—		—
Ending balance collectively evaluated for impairment	$	—	$	—	$	74,669		$	16,265		$	—	$	90,934

	FUSB & ALC
	Three Months Ended March 31 , 201 6
	Commercial		Commercial Real Estate			Consumer			Residential Real Estate			Other			Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	133	$	1,118		$	2,230		$	286		$	14		$	3,781
Charge-offs		—		—			(786	)		(5	)		—			(791	)
Recoveries		12		—			197			9			—			218
Provision		107		(487	)		492			64			(9	)		167
Ending balance		252		631			2,133			354			5			3,375
Ending balance individually evaluated for impairment		72		220			—			—			—			292
Ending balance collectively evaluated for impairment	$	180	$	411		$	2,133		$	354		$	5		$	3,083
Loan receivables:
Ending balance		34,568		112,525			81,283			46,888			407			275,671
Ending balance individually evaluated for impairment		436		2,224			—			—			—			2,660
Ending balance collectively evaluated for impairment	$	34,132	$	110,301		$	81,283		$	46,888		$	407		$	273,011

	FUSB
	Year Ended December 31, 201 5
	Commercial			Commercial Real Estate			Consumer			Residential Real Estate			Other		Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	141		$	2,810		$	114		$	421		$	—	$	3,486
Charge-offs		—			(767	)		(17	)		(68	)		—		(852	)
Recoveries		61			12			70			111			—		254
Provision		(69	)		(937	)		(139	)		(428	)		14		(1,559	)
Ending balance		133			1,118			28			36			—		1,329
Ending balance individually evaluated for impairment		80			230			—			—			—		310
Ending balance collectively evaluated for impairment	$	53		$	888		$	28		$	36		$	14	$	1,019
Loan receivables:
Ending balance		29,377			107,670			7,057			30,730			379		175,213
Ending balance individually evaluated for impairment		444			2,270			—			—			—		2,714
Ending balance collectively evaluated for impairment	$	28,933		$	105,400		$	7,057		$	30,730		$	379	$	172,499

	ALC
	Year Ended December 31, 201 5
	Commercial		Commercial Real Estate		Consumer			Residential Real Estate			Other		Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	—	$	—	$	2,336		$	346		$	—	$	2,682
Charge-offs		—		—		(2,552	)		(187	)		—		(2,739	)
Recoveries		—		—		712			22			—		734
Provision		—		—		1,706			69			—		1,775
Ending balance		—		—		2,202			250			—		2,452
Ending balance individually evaluated for impairment		—		—		—			—			—		—
Ending balance collectively evaluated for impairment	$	—	$	—	$	2,202		$	250		$	—	$	2,452
Loan receivables:
Ending balance		—		—		76,131			17,233			—		93,364
Ending balance individually evaluated for impairment		—		—		—			—			—		—
Ending balance collectively evaluated for impairment	$	—	$	—	$	76,131		$	17,233		$	—	$	93,364

	FUSB & ALC
	Year Ended December 31, 201 5
	Commercial			Commercial Real Estate			Consumer			Residential Real Estate			Other		Total
	(Dollars in Thousands)
Allowance for loan losses:
Beginning balance	$	141		$	2,810		$	2,450		$	767		$	—	$	6,168
Charge-offs		—			(767	)		(2,569	)		(255	)		—		(3,591	)
Recoveries		61			12			782			133			—		988
Provision		(69	)		(937	)		1,567			(359	)		14		216
Ending balance		133			1,118			2,230			286			—		3,781
Ending balance individually evaluated for impairment		80			230			—			—			—		310
Ending balance collectively evaluated for impairment	$	53		$	888		$	2,230		$	286		$	14	$	3,471
Loan receivables:
Ending balance		29,377			107,670			83,188			47,963			379		268,577
Ending balance individually evaluated for impairment		444			2,270			—			—			—		2,714
Ending balance collectively evaluated for impairment	$	28,933		$	105,400		$	83,188		$	47,963		$	379	$	265,863

Credit Quality:

The Bank utilizes a

credit grading system that provides a uniform framework for establishing and monitoring credit risk in the loan portfolio. Under this system, each loan is graded based on pre-determined risk metrics and categorized into one of nine risk grades. These risk grades can be summarized into categories described as pass, special mention, substandard, doubtful and loss, as described in further detail below.

●

Pass (Risk Grades 1-5): Loans in this category include obligations

in which the probability of default is considered low.

●

Special Mention (Risk Grade 6):

Loans in this category exhibit potential credit weaknesses or downward trends deserving Bank management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or in the Bank’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Bank to sufficient risk to warrant adverse classification. Although a special mention asset has a higher probability of default than pass-rated categories, its default is not imminent.

●

Substandard (Risk Grade 7):

Loans in this category have defined weaknesses that jeopardize the orderly liquidation of debt. A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy, although no loss of principal is envisioned. There is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified as substandard.

●

Doubtful (Risk Grade 8):

Loans classified as doubtful have all of the weaknesses found in substandard loans, with the added characteristic that the weaknesses make collection of debt in full, based on currently existing facts, conditions and values, highly questionable or improbable. Serious problems exist such that partial loss of principal is likely; however, because of certain important, reasonably specific pending factors that may work to strengthen the assets, the loans’ classification as estimated losses is deferred until a more exact status may be determined. Such pending factors may include proposed merger, acquisition or liquidation procedures, capital injection, perfection of liens on additional collateral and refinancing plans. Loans classified as doubtful may include loans to borrowers that have demonstrated a history of failing to live up to agreements.

●

Loss (Risk Grade 9):

Loans are classified in this category when borrowers are deemed incapable of repayment of unsecured debt. Loans to such borrowers are considered uncollectable and of such little value that continuance as active assets of the Bank is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not prudent to defer writing off these assets, even though partial recovery may be effected in the future.

At ALC, because the loan portfolio is more uniform in nature, each loan is categorized into one of two risk grades, depending on whether the loan is considered to be performing or nonperforming. Performing loans are loans that are paying principal and interest in accordance with

a contractual agreement. Nonperforming loans are loans that are either not paying as contractually agreed or that have demonstrated characteristics that indicate a probability of loss.

The tables below illustrate the carrying amount of loans by credit quality indicator as of

March 31, 2016.

	FUSB
	Pass 1-5		Special Mention 6		Substandard 7		Doubtful 8		Total
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	16,100	$	—	$	1,923	$	—	$	18,023
Secured by 1-4 family residential properties		29,216		224		1,183		—		30,623
Secured by multi-family residential properties		11,580		—		—		—		11,580
Secured by non-farm, non-residential properties		77,869		3,989		896		—		82,754
Other		168		—		—		—		168
Commercial and industrial loans		33,381		480		707		—		34,568
Consumer loans		6,499		—		115		—		6,614
Other loans		407		—		—		—		407
Total	$	175,220	$	4,693	$	4,824	$	—	$	184,737

	ALC
	Performing		Nonperforming		Total
	(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties	$	15,856	$	409	$	16,265
Consumer loans		73,265		1,404		74,669
Total	$	89,121	$	1,813	$	90,934

The tables below illustrate the carrying amount of loans by credit quality indicator as of December

31, 2015.

	FUSB
	Pass 1-5		Special Mention 6		Substandard 7		Doubtful 8		Total
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	9,862	$	—	$	1,965	$	—	$	11,827
Secured by 1-4 family residential properties		29,252		228		1,250		—		30,730
Secured by multi-family residential properties		11,845		—		—		—		11,845
Secured by non-farm, non-residential properties		78,647		4,315		921		—		83,883
Other		115		—		—		—		115
Commercial and industrial loans		28,170		482		752		—		29,377
Consumer loans		6,905		—		152		—		7,057
Other loans		379		—		—		—		379
Total	$	165,175	$	5,025	$	5,013	$	—	$	175,213

	ALC
	Performing		Nonperforming		Total
	(Dollars in Thousands)
Loans secured by real estate:
Secured by 1-4 family residential properties	$	16,964	$	269	$	17,233
Consumer loans		74,743		1,388		76,131
Total	$	91,707	$	1,657	$	93,364

The following tables provide an aging analysis of past due loans by class as of

March 31, 2016.

	FUSB
	As of March 31 , 201 6
	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days And Accruing
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	40	$	—	$	86	$	126	$	17,897	$	18,023	$	—
Secured by 1-4 family residential properties		69		25		463		557		30,066		30,623		—
Secured by multi-family residential properties		—		—		—		—		11,580		11,580		—
Secured by non-farm, non-residential properties		—		—		148		148		82,606		82,754		—
Other		—		—		—		—		168		168		—
Commercial and industrial loans		73		38		—		111		34,457		34,568		—
Consumer loans		38		—		22		60		6,554		6,614		—
Other loans		—		—		—		—		407		407		—
Total	$	220	$	63	$	719	$	1,002	$	183,735	$	184,737	$	—

	ALC
	As of March 31 , 201 6
	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days And Accruing
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Secured by 1-4 family residential properties		25		15		392		432		15,833		16,265		—
Secured by multi-family residential properties		—		—		—		—		—		—		—
Secured by non-farm, non-residential properties		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Commercial and industrial loans		—		—		—		—		—		—		—
Consumer loans		659		517		1,394		2,570		72,099		74,669		—
Other loans		—		—		—		—		—		—		—
Total	$	684	$	532	$	1,786	$	3,002	$	87,932	$	90,934	$	—

The following tables provide an aging analysis of past due loans by class as of December 31, 201

	FUSB
	As of December 31, 201 5
	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days And Accruing
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	—	$	—	$	86	$	86	$	11,741	$	11,827	$	—
Secured by 1-4 family residential properties		118		206		360		684		30,046		30,730		—
Secured by multi-family residential properties		—		—		—		—		11,845		11,845		—
Secured by non-farm, non-residential properties		530		—		148		678		83,205		83,883		—
Other		—		—		—		—		115		115		—
Commercial and industrial loans		22		52		—		74		29,303		29,377		—
Consumer loans		49		4		83		136		6,921		7,057		—
Other loans		—		—		—		—		379		379		—
Total	$	719	$	262	$	677	$	1,658	$	173,555	$	175,213	$	—

	ALC
	As of December 31, 201 5
	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans		Recorded Investment > 90 Days And Accruing
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Secured by 1-4 family residential properties		91		206		252		549		16,684		17,233		—
Secured by multi-family residential properties		—		—		—		—		—		—		—
Secured by non-farm, non-residential properties		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—
Commercial and industrial loans		—		—		—		—		—		—		—
Consumer loans		965		567		1,377		2,909		73,222		76,131		—
Other loans		—		—		—		—		—		—		—
Total	$	1,056	$	773	$	1,629	$	3,458	$	89,906	$	93,364	$	—

The following table provides an analysis of non-accruing loans by class as of

March 31, 2016 and December 31, 2015.

	Loans on Non-Accrual Status
	March 31 , 201 6		December 31, 201 5
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans	$	334	$	339
Secured by 1-4 family residential properties		1,178		968
Secured by multi-family residential properties		—		—
Secured by non-farm, non-residential properties		205		213
Commercial and industrial loans		46		47
Consumer loans		1,514		1,535
Total loans	$	3,277	$	3,102

Impaired Loans:

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the related loan agreement. If a loan is impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported at the present value of estimated future cash flows using the loan

’s existing rate or at the fair value of collateral if repayment is expected solely from the liquidation of the collateral. All loans of $0.5 million or more that have a credit quality risk grade of seven or above are identified for impairment analysis. Impaired loans, or portions thereof, are charged off when deemed uncollectable.

As of

March 31, 2016, the carrying amount of impaired loans consisted of the following:

	March 31 , 201 6
Impaired loans with no related allowance recorded	Carrying Amount		Unpaid Principal Balance		Related Allowances
	(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		54		54		—
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		—		—		—
Commercial and industrial		—		—		—
Total loans with no related allowance recorded	$	54	$	54	$	—

Impaired loans with an allowance recorded
Loans secured by real estate
Construction, land development and other land loans	$	1,411	$	1,411	$	95
Secured by 1-4 family residential properties		197		197		5
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		562		562		120
Commercial and industrial		436		436		72
Total loans with an allowance recorded	$	2,606	$	2,606	$	292

Total impaired loans
Loans secured by real estate
Construction, land development and other land loans	$	1,411	$	1,411	$	95
Secured by 1-4 family residential properties		251		251		5
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		562		562		120
Commercial and industrial		436		436		72
Total impaired loans	$	2,660	$	2,660	$	292

As of December

31, 2015, the carrying amount of impaired loans consisted of the following:

	December 31, 201 5
Impaired loans with no related allowance recorded	Carrying Amount		Unpaid Principal Balance		Related Allowances
	(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans	$	—	$	—	$	—
Secured by 1-4 family residential properties		54		54		—
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		—		—		—
Commercial and industrial		—		—		—
Total loans with no related allowance recorded	$	54	$	54	$	—

Impaired loans with an allowance recorded
Loans secured by real estate
Construction, land development and other land loans	$	1,445	$	1,445	$	95
Secured by 1-4 family residential properties		198		198		5
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		573		573		130
Commercial and industrial		444		444		80
Total loans with an allowance recorded	$	2,660	$	2,660	$	310

Total impaired loans
Loans secured by real estate
Construction, land development and other land loans	$	1,445	$	1,445	$	95
Secured by 1-4 family residential properties		252		252		5
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		573		573		130
Commercial and industrial		444		444		80
Total impaired loans	$	2,714	$	2,714	$	310

The average net investment in impaired loans and interest income recognized and received on impaired loans

during the three months ended March 31, 2016 and the year ended December 31, 2015 were as follows:

	March 31 , 201 6
	Average Recorded Investment		Interest Income Recognized		Interest Income Received
	(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans	$	1,410	$	11	$	11
Secured by 1-4 family residential properties		252		3		3
Secured by multi-family residential properties		—		—		—
Secured by non-farm, non-residential properties		566		8		8
Commercial and industrial		439		6		6
Total	$	2,667	$	28	$	28

	December 31, 201 5
	Average Recorded Investment		Interest Income Recognized		Interest Income Received
	(Dollars in Thousands)
Loans secured by real estate
Construction, land development and other land loans	$	1,493	$	44	$	46
Secured by 1-4 family residential properties		139		14		14
Secured by multi-family residential properties		1,892		—		—
Secured by non-farm, non-residential properties		3,329		35		36
Commercial and industrial		264		26		26
Total	$	7,117	$	119	$	122

Loans on which the accrual of interest has been discontinued amounted to $3.3

million and $3.1 million as of March 31, 2016 and December 31, 2015, respectively. If interest on those loans had been accrued, there would have been $22 thousand and $0.1 million of interest accrued for the periods ended March 31, 2016 and December 31, 2015, respectively. Interest income related to these loans as of March 31, 2016 and December 31, 2015 was $7 thousand and $0.3 million, respectively.

Troubled Debt Restructurings:

Troubled debt restructurings include loans with respect to which concessions have been granted to borrowers that generally would not have otherwise been considered had the borrowers not been experiencing financial difficulty. The concessions granted may include payment schedule modifications, interest rate reductions, maturity date extensions, modification

s of note structure, principal balance reductions or some combination of these concessions. Restructured loans may involve loans remaining on non-accrual, moving to non-accrual or continuing on accrual status, depending on the individual facts and circumstances of the borrower. Non-accrual restructured loans are included with all other non-accrual loans. In addition, all accruing restructured loans are reported as troubled debt restructurings. Generally, restructured loans remain on non-accrual until the customer has attained a sustained period of repayment performance under the modified loan terms (generally a minimum of six months). However, performance prior to the restructuring, or significant events that coincide with the restructuring, are considered in assessing whether the borrower can meet the new terms and whether the loan should be returned to or maintained on non-accrual status. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, then the loan remains on non-accrual. As of March 31, 2016 and December 31, 2015, respectively, the Company had $1.4 million and $1.5 million of non-accruing loans that were previously restructured and that remained on non-accrual status. For the three months ended March 31, 2016, the Company had $38 thousand in restructured loans that were restored to accrual status based on a sustained period of repayment performance. For the year ended December 31, 2015, the Company had no restructured loans that were restored to accrual status based on a sustained period of repayment performance.

The following table provides the number of loans

remaining in each loan category, as of March 31, 2016 and December 31, 2015, that the Bank had previously modified in a troubled debt restructuring, as well as the pre- and post-modification principal balance as of each date.

	March 31 , 201 6						December 31, 201 5
	Number of Loans		Pre- Modification Outstanding Principal Balance		Post- Modification Principal Balance		Number of Loans		Pre- Modification Outstanding Principal Balance		Post- Modification Principal Balance
	(Dollars in Thousands)
Loans secured by real estate:
Construction, land development and other land loans		3	$	2,220	$	1,659		3	$	2,220	$	1,698
Secured by 1-4 family residential properties		4		200		102		4		200		103
Secured by non-farm, non-residential properties		2		113		49		2		113		52
Commercial loans		2		116		94		2		116		94
Total		11	$	2,649	$	1,904		11	$	2,649	$	1,947

Restructured loan modifications primarily included maturity date extensions and payment schedule modifications. There were no modifications to principal balances of the loans that were restructured. Accordingly, there was no impact on the Company

’s allowance for loan losses resulting from the modifications. None of the loans that were previously modified in a troubled debt restructuring as of March 31, 2016 and December 31, 2015 have defaulted subsequent to modification.

All loans with a principal balance of $0.5 million or more that have been modified in a troubled debt restructuring are considered impaired and evaluated individually for impairment. The nature and extent of impairment of restructured loans, including those that have experienced a subsequent payment default, are considered in the determination of an appropriate level of allowance for loan losses. This evaluation resulted in an allowance for loan losses attributable to such restructured loans of

$1 thousand as of both March 31, 2016 and December 31, 2015.