Note 5. Allowance for Loan Losses

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by loan class and, for the ending loan balances, based on impairment evaluation method as of September 30, 2011 and December 31, 2010. A rollforward of the changes in the allowance for loan losses balance by class of loan is also presented for the period ended September 30, 2011.


	September 30, 2011 (In Thousands)
				Real Estate		Real Estate
	Real Estate			Secured by		Secured by 1-4			Other Real
	Construction			Farmland		Family Residential			Estate Loans			Commercial			Consumer			Total
Allowance for loan losses:
Balance at December 31, 2010	$	4,684		$	107	$	3,965		$	4,771		$	1,055		$	385		$	14,967
Chargeoffs		(363	)		-		(1,417	)		(396	)		(82	)		(314	)		(2,572	)
Recoveries		28			-		13			78			23			22			164
Provision		(2,137	)		3		4,389			(279	)		547			42			2,565
Balance at September 30, 2011	$	2,212		$	110	$	6,950		$	4,174		$	1,543		$	135		$	15,124

Ending allowance balance:
Ending allowance balance attributable to loans:

Individually evaluated for impairment	$	416		$	-	$	3,031		$	1,033		$	405		$	-		$	4,885

Collectively evaluated for impairment		1,796			110		3,919			3,141			1,138			135			10,239

Total ending allowance balance	$	2,212		$	110	$	6,950		$	4,174		$	1,543		$	135		$	15,124

Ending loan recorded investment balances:

Individually evaluated for impairment	$	4,229		$	-	$	16,466		$	8,046		$	2,147		$	-		$	30,889

Collectively evaluated for impairment		44,343			10,377		223,272			265,777			89,149			12,007			644,924

Total ending loans balance	$	48,572		$	10,377	$	239,738		$	273,823		$	91,296		$	12,007		$	675,813

	December 31, 2010 (In thousands)
			Real Estate		Real Estate
	Real Estate		Secured by		Secured by 1-4		Other Real
	Construction		Farmland		Family Residential		Estate Loans		Commercial		Consumer		Total
Ending allowance balance:

Ending allowance balance attributable to loans:

Individually evaluated for impairment	$	1,876	$	-	$	1,099	$	2,010	$	108	$	239	$	5,332

Collectively evaluated for impairment		2,808		107		2,866		2,761		947		146		9,635

Total ending allowance balance	$	4,684	$	107	$	3,965	$	4,771	$	1,055	$	385	$	14,967

Ending recorded investment balances:

Individually evaluated for impairment	$	9,170	$	-	$	10,872	$	8,359	$	1,950	$	239	$	30,590

Collectively evaluated for impairment		58,940		11,532		231,748		259,903		54,435		12,164		628,722

Total ending loans balance	$	68,110	$	11,532	$	242,620	$	268,262	$	56,385	$	12,403	$	659,312

Changes in the allowance for loan losses for the year ended December 31, 2010 is summarized as follows:

	Year
	Ended
	December 31, 2010



Balance, beginning of year	$	9,185

Provision for loan losses		12,005

Charge-offs:

Real estate loans:
Construction		1,226
Secured by 1-4 family residential		3,256
Other real estate loans		460
Commercial loans		942
Consumer loans		500
Total charge-offs	$	6,384

Recoveries:

Real estate loans:
Construction	$	-
Secured by 1-4 family residential		37
Other real estate loans		4
Commercial loans		68
Consumer loans		52
Total recoveries	$	161

Net charge-offs		6,223

Balance, end of period	$	14,967