Note 7 – Allowance for Credit Losses

The allowance for credit losses includes amounts to cover losses related to the net investment in leases, commercial loans, and transactions-in-process (“risk assets”). A summary of the allocation of the allowance for credit losses and selected statistics is as follows:

	June 30,
	2016			2015
	(dollars in thousands)
Allowance for credit losses at beginning of year	$	6,456		$	5,299
Charge-off of leases		(1,120	)		(19	)
Recovery of lease amounts previously written off		51			1
Provision for credit losses		1,475			1,175
Allowance for credit losses at end of year	$	6,862		$	6,456

Components of allowance for credit losses:
Allowance for lease losses	$	2,290		$	3,409
Allowance for loan losses		4,572			3,047
	$	6,862		$	6,456
Allowance for credit losses as percent of net investment in leases and loans before allowances		1.06	%		1.18	%

Net recoveries (charge-offs) as percent of average leases and loans		(0.2	%)		0.00	%

In addition to the allowance for credit losses, the Company has recorded a liability for unfunded loan commitments of $50,000 at June 30, 2016 and 2015.