Note 4.

Allowance for loan losses

Activity in the allowance for loan losses was as follows for the periods indicated.

	Allowance for Loan Losses
	Beginning		Provision for								Ending
	Balance		Loan Losses			Charge-offs			Recoveries		Balance

Year Ended December 31, 2013
Construction and land development
Residential	$	494,742	$	(462,542	)	$	-		$	101,800	$	134,000
Commercial		4,611,410		(3,481,833	)		(278,703	)		424,126		1,275,000
Total construction and land development		5,106,152		(3,944,375	)		(278,703	)		525,926		1,409,000
Commercial real estate
Owner occupied		1,358,863		252,484			(453,996	)		42,649		1,200,000
Non-owner occupied		816,852		451,603			(619,455	)		20,000		669,000
Multifamily		23,434		(4,434	)		-			-		19,000
Farmland		-		1,233,000			(896,000	)		-		337,000
Total commercial real estate		2,199,149		1,932,653			(1,969,451	)		62,649		2,225,000
Consumer real estate
Home equity lines		658,135		23,284			(266,119	)		8,700		424,000
Secured by 1-4 family residential
First deed of trust		1,358,102		2,492,702			(1,953,177	)		94,373		1,992,000
Second deed of trust		223,307		498,415			(367,200	)		38,478		393,000
Total consumer real estate		2,239,544		3,014,401			(2,586,496	)		141,551		2,809,000
Commercial and industrial loans (except those secured by real estate)		1,161,654		144,821			(759,726	)		177,251		724,000
Consumer and other		101,328		25,500			(64,642	)		9,478		71,664

Total	$	10,807,827	$	1,173,000		$	(5,659,018	)	$	916,855	$	7,238,664

Year Ended December 31, 2012
Construction and land development
Construction and land development	$	704,728	$	542,067		$	(797,286	)	$	45,233	$	494,742
Residential		6,798,177		3,444,160			(5,645,064	)		14,137		4,611,410
Commercial		7,502,905		3,986,227			(6,442,350	)		59,370		5,106,152
Total construction and land development
Commercial real estate
Owner occupied		1,496,466		623,552			(961,155	)		200,000		1,358,863
Non-owner occupied		1,548,899		(300,898	)		(431,354	)		205		816,852
Multifamily		406,635		(373,238	)		(9,963	)		-		23,434
Farmland		-		-			-			-		-
Total commercial real estate		3,452,000		(50,584	)		(1,402,472	)		200,205		2,199,149
Consumer real estate
Home equity lines		860,307		668,614			(883,848	)		13,062		658,135
Secured by 1-4 family residential
First deed of trust		1,881,470		2,610,905			(3,220,072	)		85,799		1,358,102
Second deed of trust		397,504		468,192			(663,135	)		20,746		223,307
Total consumer real estate		3,139,281		3,747,711			(4,767,055	)		119,607		2,239,544
Commercial and industrial loans (except those secured by real estate)		1,655,713		1,230,555			(1,879,517	)		154,903		1,161,654
Consumer and other		321,525		181,091			(408,302	)		7,014		101,328

Total	$	16,071,424	$	9,095,000		$	(14,899,696	)	$	541,099	$	10,807,827

Loans were evaluated for impairment as follows for the periods indicated.

	Loans Evaluated for Impairment
	Individually		Collectively		Total

Year Ended December 31, 2013
Construction and land development
Residential	$	575,720	$	2,355,184	$	2,930,904
Commercial		15,591,987		12,586,649		28,178,636
Commercial real estate
Owner occupied		53,126,045		20,458,351		73,584,396
Non-owner occupied		34,367,226		9,500,842		43,868,068
Multifamily		9,363,418		2,196,464		11,559,882
Farmland		778,599		684,712		1,463,311
Consumer real estate
Home equity lines		1,381,700		19,864,332		21,246,032
Secured by 1-4 family residential
First deed of trust		8,968,659		57,903,985		66,872,644
Second deed of trust		532,977		8,142,241		8,675,218
Commercial and industrial loans (except those secured by real estate)		10,844,894		15,408,947		26,253,841
Consumer and other		-		1,929,770		1,929,770

Total	$	135,531,225	$	151,031,477	$	286,562,702

Year Ended December 31, 2012
Construction and land development
Residential	$	1,247,709	$	1,597,885	$	2,845,594
Commercial		27,351,857		13,857,974		41,209,831
Commercial real estate
Owner occupied		67,167,587		25,604,945		92,772,532
Non-owner occupied		41,801,577		12,749,240		54,550,817
Multifamily		6,461,639		1,516,750		7,978,389
Farmland		1,391,501		1,189,796		2,581,297
Consumer real estate
Home equity lines		2,185,040		23,336,357		25,521,397
Secured by 1-4 family residential
First deed of trust		15,526,551		65,261,874		80,788,425
Second deed of trust		557,600		8,959,645		9,517,245
Commercial and industrial loans (except those secured by real estate)		15,101,291		19,282,826		34,384,117
Consumer and other		-		2,760,622		2,760,622

Total	$	178,792,352	$	176,117,914	$	354,910,266