| Loans Receivable | Loans Receivable Loans not covered by loss share agreements are summarized as follows: June 30, 2015 September 30, 2014 Loans not covered by loss sharing agreements: 1-4 family residential real estate $ 174,824,074 $ 152,810,501 Commercial real estate 356,949,845 300,556,023 Commercial 30,078,090 24,759,682 Real estate construction 70,188,946 63,485,411 Consumer and other 4,853,911 4,959,103 Loans receivable, net of undisbursed proceeds of loans in process 636,894,866 546,570,720 Less: Unamortized loan origination fees, net 1,404,319 1,364,853 Allowance for loan losses 8,484,986 8,473,373 Total loans not covered, net $ 627,005,561 $ 536,732,494 The carrying amount of covered loans at June 30, 2015 and September 30, 2014 , consisted of impaired loans at acquisition date and all other acquired loans and are presented in the following tables: June 30, 2015 Impaired Loans at Acquisition All Other Acquired Loans Total Covered Loans Loans covered by loss sharing agreements: 1-4 family residential real estate $ 3,129,270 $ 4,829,762 $ 7,959,032 Commercial real estate 23,481,521 18,701,411 42,182,932 Commercial 1,249,269 572,694 1,821,963 Real estate construction — — — Consumer and other — 70,394 70,394 Loans receivable, gross 27,860,060 24,174,261 52,034,321 Less: Nonaccretable difference 1,014,200 249,204 1,263,404 Allowance for covered loan losses — 948,200 948,200 Accretable discount 2,971,816 934,795 3,906,611 Discount on acquired performing loans — 91,746 91,746 Unamortized loan origination fees, net — (134 ) (134 ) Total loans covered, net $ 23,874,044 $ 21,950,450 $ 45,824,494 September 30, 2014 Impaired Loans at Acquisition All Other Acquired Loans Total Covered Loans Loans covered by loss sharing agreements: 1-4 family residential real estate $ 4,841,705 $ 6,800,846 $ 11,642,551 Commercial real estate 33,053,228 34,354,816 67,408,044 Commercial 1,871,879 1,800,989 3,672,868 Real estate construction — — — Consumer and other 1,418 177,228 178,646 Loans receivable, gross 39,768,230 43,133,879 82,902,109 Less: Nonaccretable difference 5,993,661 273,024 6,266,685 Allowance for covered loan losses — 997,524 997,524 Accretable discount 3,073,198 2,770,499 5,843,697 Discount on acquired performing loans — 142,731 142,731 Unamortized loan origination fees, net — 17,253 17,253 Total loans covered, net $ 30,701,371 $ 38,932,848 $ 69,634,219 The following table documents changes in the accretable discount on acquired credit impaired loans during the nine months ended June 30, 2015 and the year ended September 30, 2014 : Impaired Loans at Acquisition All Other Acquired Loans Total Covered Loans Balance, September 30, 2013 $ 3,508,430 $ 1,164,941 $ 4,673,371 Loan accretion (3,979,390 ) (2,579,144 ) (6,558,534 ) Transfer from nonaccretable difference 3,544,158 4,184,702 7,728,860 Balance, September 30, 2014 3,073,198 2,770,499 5,843,697 Loan accretion (2,459,764 ) (1,900,843 ) (4,360,607 ) Transfer from nonaccretable difference 2,358,382 65,139 2,423,521 Balance, June 30, 2015 $ 2,971,816 $ 934,795 $ 3,906,611 The following is a summary of transactions during the three and nine months ended June 30, 2015 and 2014 in the allowance for loan losses on loans covered by loss sharing: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Balance, beginning of period $ 946,314 $ 2,268,000 $ 997,524 $ 3,924,278 Loans charged off, gross — (385,900 ) (64,853 ) (524,784 ) Recoveries on loans previously charged off 1,886 9,119 15,529 93,269 Provision (benefit) for loan losses charged (reversed) to FDIC receivable — — — (1,549,966 ) Transfer of allowance on acquired NCB non-single family loans — (400,000 ) — (400,000 ) Provision for loan losses charged to operations — (834,086 ) — (885,664 ) Balance, end of period $ 948,200 $ 657,133 $ 948,200 $ 657,133 The following table documents changes in the carrying value of the FDIC receivable for loss sharing agreements relating to covered loans and other real estate owned during the nine months ended June 30, 2015 and the year ended September 30, 2014 : Nine Months Ended Year Ended Balance, beginning of period $ 10,531,809 $ 29,941,862 Payments received from FDIC (2,925,377 ) (10,954,707 ) Accretion of fair value adjustment 94,230 347,347 Impairment — (521,637 ) Amortization (2,387,205 ) (3,507,017 ) Recovery of previous loss reimbursements (2,587,002 ) (6,762,304 ) Reduction in previous loss estimates — (1,549,967 ) Provision for estimated losses on covered assets recognized in noninterest expense 830,225 1,426,762 External expenses qualifying under loss sharing agreements 916,694 2,111,470 Balance, end of period $ 4,473,374 $ 10,531,809 During the quarterly reevaluation of cash flows on acquired loans, the Company revised its estimate of cash flows related to covered loans, resulting in a transfer of $1.2 million from nonaccretable discount to accretable yield related to the First National Bank of Florida (“FNB”) acquisition. In accordance with accounting guidance, the transferred amount will be accreted into income prospectively over the estimated remaining life of the loan pools. Concurrently, approximately $1.7 million , which previously represented cash flows receivable from the FDIC and included in the FDIC receivable for loss sharing agreements on the balance sheet will be amortized into interest income over the remaining life of the loan pools or the agreements with the FDIC, whichever is shorter. Loan Origination and Risk Management. The Company has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Diversification in the loan portfolio is a means of managing risk associated with fluctuations in economic conditions. Commercial real estate loans are generally made by the Company to Georgia, Alabama or Florida panhandle entities and are secured by properties in these states. Commercial real estate lending involves additional risks compared to one- to four-family residential lending. Repayment of commercial real estate loans often depends on the successful operations and income stream of the borrowers, and commercial real estate loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential real estate loans. The Company’s underwriting criteria for commercial real estate loans include maximum loan-to-value ratios, debt coverage ratios, secondary sources of repayment, guarantor requirements, net worth requirements and quality of cash flow. As part of the loan approval and underwriting of commercial real estate loans, management undertakes a cash flow analysis, and generally requires a debt-service coverage ratio of at least 1.15 times. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. At June 30, 2015 , approximately 21.4% of the outstanding principal balance of the Company’s commercial real estate loans was secured by owner-occupied properties. The Company makes construction and land development loans primarily for the construction of one- to four-family residences but also for multi-family and nonresidential real estate projects on a select basis. The Company offers construction loans to builders including both speculative (unsold) and pre-sold loans to pre-approved local builders. The number of speculative loans that management will extend to a builder at one time depends upon the financial strength and credit history of the builder. The Company’s construction loan program is expected to remain a modest portion of the loan volume and management generally limits the number of outstanding loans on unsold homes under construction within a specific area. The Company also originates first and second mortgage loans and home equity lines of credit secured by one- to four-family residential properties within Georgia, Alabama and the Florida panhandle. Management currently originates mortgages at all branch locations, but utilizes a centralized processing location to reduce the underwriting risk. The Company originates both fixed rate and adjustable rate one- to four-family residential mortgage loans. Fixed rate 30 year conforming loans are generally originated for resale into the secondary market and loans that are non-conforming due to property exceptions and that have adjustable rates are generally retained in the Company’s portfolio. The non-conforming loans originated are not considered to be subprime loans and the amount of subprime and low documentation loans held by the Company is not material. The Company also offers home equity lines of credit as a complement to one- to four-family residential mortgage lending. The underwriting standards applicable to home equity credit lines are similar to those for one- to four-family residential mortgage loans, except for slightly more stringent credit-to-income and credit score requirements. Home equity loans are generally limited to 80% of the value of the underlying property unless the loan is covered by private mortgage insurance or a loss sharing agreement. At June 30, 2015 , the Company had $14.6 million of home equity lines of credit and second mortgage loans not covered by FDIC loss sharing agreements (“loss sharing”). The Company originates consumer loans that consist of loans on deposits, auto loans and various other installment loans. The Company primarily offers consumer loans as an accommodation to customers. Consumer loans tend to have a higher credit risk than residential mortgage loans because they may be secured by rapidly depreciable assets, or may be unsecured. The Company’s consumer lending generally follows accepted industry standards for non-subprime lending, including credit scores and debt to income ratios. The Company’s commercial business loans are generally limited to terms of five years or less. Management typically collateralizes these loans with a lien on commercial real estate or, much less frequently, with a lien on business assets and equipment. Management also generally requires the personal guarantee of the business owner. Interest rates on commercial business loans are generally higher than interest rates on residential or commercial real estate loans due to the risk inherent in this type of loan. Commercial business loans are generally considered to have more risk than residential mortgage loans or commercial real estate loans because the collateral may be in the form of intangible assets and/or readily depreciable inventory. Commercial business loans may also involve relatively large loan balances to single borrowers or groups of related borrowers, with the repayment of such loans typically dependent on the successful operation and income stream of the borrower. Such risks can be significantly affected by economic conditions. In addition, commercial business lending generally requires substantially greater supervision efforts by management compared to residential mortgage or commercial real estate lending. The Company maintains an internal loan review function that reviews and validates the credit risk program on a periodic basis. Results of these reviews are presented to management. The loan review process complements and reinforces the risk identification and assessment decisions made by lenders and credit personnel, as well as the Company’s policies and procedures. Nonaccrual and Past Due Loans. Nonaccrual loans not covered by loss sharing, segregated by class of loans were as follows: June 30, 2015 (1) September 30, 2014 (1) 1-4 family residential real estate $ 1,504,472 $ 982,087 Commercial real estate 2,720,986 2,369,520 Commercial 78,533 156,474 Real estate construction — — Consumer and other 6,275 — Total $ 4,310,266 $ 3,508,081 __________________________________ (1) Acquired McIntosh Commercial Bank (“MCB”) and Neighborhood Community Bank (“NCB”) FAS ASC 310-30 loans that are no longer covered under their respective commercial loss sharing agreements with the FDIC in the amount of $3.4 million at June 30, 2015 are excluded. Additionally, acquired NCB FAS ASC 310-30 loans that are no longer covered under the commercial loss sharing agreement with the FDIC in the amount of $1.3 million at September 30, 2014 are excluded. Due to the recognition of accretion income established at the time of acquisition, FAS ASC 310-30 loans that are greater than 90 days delinquent or designated nonaccrual status are regarded as accruing loans. The MCB and NCB non-single family loss sharing agreements with the FDIC expired in March 2015 and June 2014, respectively. An age analysis of past due loans not covered by loss sharing, segregated by class of loans at June 30, 2015 and September 30, 2014 were as follows: June 30, 2015 30-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current Total Loans Loans > 90 Days Accruing (1) 1-4 family residential real estate $ 972,140 $ 266,233 $ 1,238,373 $ 173,585,701 $ 174,824,074 $ 5,864 Commercial real estate 685,084 1,357,834 2,042,918 354,906,927 356,949,845 513,916 Commercial 117,784 — 117,784 29,960,306 30,078,090 — Real estate construction — — — 70,188,946 70,188,946 — Consumer and other 28,952 — 28,952 4,824,959 4,853,911 — Total $ 1,803,960 $ 1,624,067 $ 3,428,027 $ 633,466,839 $ 636,894,866 $ 519,780 __________________________________ (1) Previously covered loans in the amount of $519,780 are now reflected in the Greater than 90 Days Accruing column. These loans which are accounted for under ASC 310-30 are reported as accruing loans because of accretable discounts established at the time of acquisition. September 30, 2014 30-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current Total Loans Loans > 90 Days Accruing (1) 1-4 family residential real estate $ 1,927,860 $ 545,179 $ 2,473,039 $ 150,337,462 $ 152,810,501 $ 516,659 Commercial real estate 254,423 1,943,161 2,197,584 298,358,439 300,556,023 1,218,188 Commercial 62,479 1,000 63,479 24,696,203 24,759,682 — Real estate construction — — — 63,485,411 63,485,411 — Consumer and other 31,306 4,354 35,660 4,923,443 4,959,103 4,354 Total $ 2,276,068 $ 2,493,694 $ 4,769,762 $ 541,800,958 $ 546,570,720 $ 1,739,201 __________________________________ (1) Previously covered loans in the amount of $1,003,007 are now reflected in the Greater than 90 Days Accruing column. These loans which are accounted for under ASC 310-30 are reported as accruing loans because of accretable discounts established at the time of acquisition. An age analysis of past due loans covered by loss sharing, segregated by class of loans at June 30, 2015 and September 30, 2014 were as follows: June 30, 2015 30-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current Total Loans (1) Loans > 90 Days Accruing (2) 1-4 family residential real estate $ 65,756 $ 42,032 $ 107,788 $ 7,194,395 $ 7,302,183 $ 42,032 Commercial real estate 17,542 1,126,848 1,144,390 39,591,281 40,735,671 1,126,848 Commercial 55,948 78,997 134,945 1,611,379 1,746,324 78,997 Real estate construction — — — — — — Consumer and other — — — 38,539 38,539 — Total $ 139,246 $ 1,247,877 $ 1,387,123 $ 48,435,594 $ 49,822,717 $ 1,247,877 __________________________________ (1) Covered loan balances are net of nonaccretable differences and allowance for covered loan losses and have not been reduced by $3,998,357 of accretable discounts and discounts on acquired performing loans. (2) Covered loans contractually past due greater than ninety days are reported as accruing loans because of accretable discounts established at the time of acquisition. September 30, 2014 30-89 Days Past Due Greater than 90 Days Past Due Total Past Due Current Total Loans (1) Loans > 90 Days (2) 1-4 family residential real estate $ 414,699 $ 814,238 $ 1,228,937 $ 9,448,399 $ 10,677,336 $ 814,238 Commercial real estate 1,399,520 3,949,083 5,348,603 55,950,984 61,299,587 3,949,083 Commercial 387,641 551,721 939,362 2,573,517 3,512,879 551,721 Real estate construction — — — — — — Consumer and other — — — 148,098 148,098 — Total $ 2,201,860 $ 5,315,042 $ 7,516,902 $ 68,120,998 $ 75,637,900 $ 5,315,042 __________________________________ (1) Covered loan balances are net of nonaccretable differences and allowance for covered loan losses and have not been reduced by $5,986,428 of accretable discounts and discounts on acquired performing loans. (2) Covered loans contractually past due greater than ninety days are reported as accruing loans because of accretable discounts established at the time of acquisition. Impaired Loans. The Company evaluates “impaired” loans, which include nonperforming loans and accruing troubled debt restructured loans, having risk characteristics that are unique to an individual borrower on a loan-by-loan basis with balances above a specified level. For smaller loans, the allowance is calculated based on the credit grade utilizing historical loss experience and other qualitative factors. Impaired loans not covered by loss sharing, and segregated by class of loans, were as follows: June 30, 2015 Three Months Ended Nine Months Ended Recorded Investment Unpaid Principal Balance Average Investment in Impaired Loans Interest Income Recognized Average Investment in Impaired Loans Interest Income Recognized With no related allowance recorded: 1-4 family residential real estate $ 1,643,734 $ 2,201,725 $ 1,684,652 $ 1,779 $ 1,730,158 $ 11,321 Commercial real estate 8,686,630 10,540,798 8,718,016 85,800 8,774,550 263,329 Commercial 78,533 101,026 82,499 — 92,982 324 Total: $ 10,408,897 $ 12,843,549 $ 10,485,167 $ 87,579 $ 10,597,690 $ 274,974 There were no recorded allowances for impaired loans not covered by loss sharing at June 30, 2015 . The recorded investment in accruing troubled debt restructured loans at June 30, 2015 totaled $6,104,907 and is included in the impaired loan table above. September 30, 2014 Year Ended September 30, 2014 Recorded Investment Unpaid Principal Balance Average Investment in Impaired Loans Interest Income Recognized With no related allowance recorded: 1-4 family residential real estate $ 1,550,777 $ 2,077,942 $ 1,737,505 $ 31,656 Commercial real estate 8,687,088 10,510,893 9,196,747 373,711 Commercial 156,474 205,625 188,458 — Total: $ 10,394,339 $ 12,794,460 $ 11,122,710 $ 405,367 There were no recorded allowances for impaired loans not covered by loss sharing at September 30, 2014 . The recorded investment in accruing troubled debt restructured loans at September 30, 2014 totaled $6,154,420 and is included in the impaired loan table above. Credit Quality Indicators . As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio for both loans covered and not covered by loss sharing agreements with the FDIC, management tracks certain credit quality indicators including the level of classified loans, net charge-offs, nonperforming loans (see details above) and the general economic conditions in its market areas. The Company utilizes a risk grading to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 8. The risk grade for each individual loan is determined by the loan officer and other approving officers at the time of loan origination and is adjusted from time to time to reflect an ongoing assessment of loan risk. Risk grades are reviewed on specific loans monthly for all delinquent loans as a part of monthly meetings held by the Loan Committee, quarterly for all nonaccrual and special reserve loans, and annually as part of the Company’s internal loan review process. In addition, individual loan risk grades are reviewed in connection with all renewals, extensions and modifications. Risk grades for covered loans are determined by officers within the Special Assets Division based on an ongoing assessment of loan risk. Such risk grades are updated in a manner consistent with non-covered loans, except the grading of such loans is assessed quarterly, as applicable, relating to revised estimates of expected cash flows. The following table presents the risk grades of the loan portfolio not covered by loss sharing, segregated by class of loans: June 30, 2015 1-4 family residential real estate Commercial real estate Commercial Real estate construction Consumer and other Total Pass (1-4) $ 171,891,902 $ 331,900,036 $ 29,468,803 $ 70,188,946 $ 4,818,652 $ 608,268,339 Special Mention (5) 660,116 693,416 13,442 — — 1,366,974 Substandard (6) 2,272,056 24,356,393 595,845 — 35,259 27,259,553 Doubtful (7) — — — — — — Loss (8) — — — — — — Total not covered loans $ 174,824,074 $ 356,949,845 $ 30,078,090 $ 70,188,946 $ 4,853,911 $ 636,894,866 September 30, 2014 1-4 family residential real estate Commercial real estate Commercial Real estate construction Consumer and other Total Pass (1-4) $ 151,661,479 $ 273,587,373 $ 23,205,880 $ 63,485,411 $ 4,954,661 $ 516,894,804 Special Mention (5) — 3,325,324 91,000 — — 3,416,324 Substandard (6) 1,149,022 23,643,326 1,462,802 — 4,442 26,259,592 Doubtful (7) — — — — — — Loss (8) — — — — — — Total not covered loans $ 152,810,501 $ 300,556,023 $ 24,759,682 $ 63,485,411 $ 4,959,103 $ 546,570,720 The following table presents the risk grades, ignoring grade enhancement provided by the FDIC loss sharing, of the loan portfolio covered by loss sharing agreements, segregated by class of loans at June 30, 2015 and September 30, 2014 . Numerical risk ratings 5-8 constitute classified assets for regulatory reporting; however, regulatory authorities consider the FDIC loss sharing percentage of either 80% or 95% , as applicable, as a reduction of the regulatory classified balance for covered loans. With respect to classified assets covered by loss sharing agreements, numerical risk ratings 5-8, for regulatory reporting purposes are done under FDIC guidance reporting the Bank’s non-reimbursable amount of the book balance of the loans as classified. The remaining reimbursable portion is classified as pass, numerical risk ratings 1-4. June 30, 2015 1-4 family residential real estate Commercial real estate Commercial Real estate construction Consumer and other Total Numerical risk rating (1-4) $ 5,918,095 $ 25,716,359 $ 1,425,081 $ — $ 38,539 $ 33,098,074 Numerical risk rating (5) 62,373 3,213,245 — — — 3,275,618 Numerical risk rating (6) 1,321,715 11,806,067 321,243 — — 13,449,025 Numerical risk rating (7) — — — — — — Numerical risk rating (8) — — — — — — Total covered loans (1) $ 7,302,183 $ 40,735,671 $ 1,746,324 $ — $ 38,539 $ 49,822,717 __________________________________ (1) Covered loan balances are net of nonaccretable differences and allowances for covered loan losses and have not been reduced by $3,998,357 of accretable discounts and discounts on acquired performing loans. September 30, 2014 1-4 family residential real estate Commercial real estate Commercial Real estate construction Consumer and other Total Numerical risk rating (1-4) $ 7,392,585 $ 34,017,713 $ 1,982,382 $ — $ 74,392 $ 43,467,072 Numerical risk rating (5) 693,038 8,411,973 448,957 — — 9,553,968 Numerical risk rating (6) 2,591,713 18,869,901 1,081,540 — 73,706 22,616,860 Numerical risk rating (7) — — — — — — Numerical risk rating (8) — — — — — — Total covered loans (1) $ 10,677,336 $ 61,299,587 $ 3,512,879 $ — $ 148,098 $ 75,637,900 __________________________________ (1) Covered loan balances are net of nonaccretable differences and allowances for covered loan losses and have not been reduced by $5,986,428 of accretable discounts and discounts on acquired performing loans. Allowance for Loan Losses. The allowance for loan losses is established through a provision for loan losses charged to expense and is an amount that management believes will be adequate to absorb losses on existing loans that become uncollectible, based on evaluations of the collectability of loans. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, historical loss rates, overall portfolio quality, review of specific problem loans, and current economic conditions and trends that may affect a borrower’s ability to repay. Loans are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely and subsequent recoveries are added to the allowance. Management’s allowance for loan losses methodology is a loan classification-based system. Management bases the required reserve on a percentage of the loan balance for each type of loan and classification level. Loans may be classified manually and are automatically classified if they are not previously classified when they reach certain levels of delinquency. Unclassified loans are reserved at different percentages based on the loan loss history of the last seven years. Reserve percentages are also adjusted based upon our estimate of the effect that the current economic environment will have on each type of loan. Management segments its allowance for loan losses into the following four major categories: (1) specific reserves; (2) general allowances for Classified/Watch loans; (3) general allowances for loans with satisfactory ratings; and (4) an unallocated amount. Risk ratings are initially assigned in accordance with CharterBank’s loan and collection policy. An organizationally independent department reviews risk grade assignments on an ongoing basis. Management reviews current information and events regarding a borrowers’ financial condition and strengths, cash flows available for debt repayment, the related collateral supporting the loan and the effects of known and expected economic conditions. When the evaluation reflects a greater than normal risk associated with the individual loan, management classifies the loan accordingly. If the loan is determined to be impaired, management allocates a portion of the allowance for loan losses for that loan based on the fair value of the collateral, if the loan is considered collateral-dependent, as the measure for the amount of the impairment. Impaired and Classified/Watch loans are aggressively monitored. The allowances for loans by credit grade are further subdivided by loan type. The Company has developed specific quantitative allowance factors to apply to each loan which considers loan charge-off experience over the most recent seven years by loan type. In addition, loss estimates are applied for certain qualitative allowance factors that are subjective in nature and require considerable judgment on the part of management. Such qualitative factors include economic and business conditions, the volume of past due loans, changes in the value of collateral of collateral-dependent loans, and other economic uncertainties. An unallocated component of the allowance is also established for potential losses that exist in the remainder of the portfolio, but have yet to be identified. The Company incorporates certain refinements and improvements to its allowance for loan losses methodology from time to time. During the previous fiscal year, the Company made certain refinements in its allowance methodology. The Company increased the look back period of historical losses from 24 months to 84 months as net charge-offs for the seven year period ended June 30, 2015 were more reflective of a full credit cycle than the two year period ended June 30, 2015 . In addition, some qualitative factors were removed and the loss allocation for qualitative risk factors was decreased. The increase in the historical look back period more closely aligns the quantitative aspect of the Company's allowance methodology with the risks inherent in a full credit cycle. An unallocated allowance is generally maintained in a range of 4% to 12% of the total allowance in recognition of the imprecision of the estimates and other factors. In times of greater economic downturn and uncertainty, the higher end of this range is provided. Through the FDIC-assisted acquisitions of the loans of NCB, MCB and FNB, management established nonaccretable discounts for the acquired impaired loans and also for all other loans of MCB. These nonaccretable discounts were based on estimates of future cash flows. Subsequent to the acquisition dates, management continues to assess the experience of actual cash flows compared to estimates. When management determines that nonaccretable discounts are insufficient to cover expected losses in the applicable covered loan portfolios, the allowance for covered loans is increased with a corresponding provision for covered loan losses as a charge to earnings and an increase in the applicable FDIC receivable based on loss sharing indemnification. The Company maintained its allowance for loan losses for non-covered loans for the quarter ended June 30, 2015 in response to inconsistent economic conditions, net charge-offs, financial indicators for borrowers in the real estate sectors, continuing low collateral values of commercial and residential real estate, and nonaccrual and impaired loans. However, the Company did not make a provision in the quarter ended June 30, 2015 due to the long term trend of declining net charge-offs and overall improvement in the credit quality of the loan portfolio. The following table details the allowance for loan losses on loans not covered by loss sharing by portfolio segment for the quarters ended June 30, 2015 and 2014 . Allocation of a portion of the allowance to one category of loans does not preclude availability to absorb losses in other categories. Three Months Ended June 30, 2015 1-4 family real estate Commercial real estate Commercial Real estate construction Consumer and other Unallocated Total Allowance for loan losses: Balance at beginning of period $ 625,506 $ 6,071,131 $ 397,611 $ 419,981 $ 14,019 $ 934,856 $ 8,463,104 Charge-offs (47,853 ) (5,033 ) (1,338 ) — — — (54,224 ) Recoveries 569 2,514 40,718 — 32,305 — 76,106 Provision 94,532 33,609 (19,665 ) 5,031 (37,948 ) (75,559 ) — Balance at end of period $ 672,754 $ 6,102,221 $ 417,326 $ 425,012 $ 8,376 $ 859,297 $ 8,484,986 Nine Months Ended June 30, 2015 1-4 family real estate Commercial real estate Commercial Real estate construction Consumer and other Unallocated Total Allowance for loan losses: Balance at beginning of period $ 812,130 $ 5,969,819 $ 400,883 $ 492,903 $ 13,990 $ 783,648 $ 8,473,373 Charge-offs (131,444 ) (58,213 ) (1,338 ) — (10,622 ) — (201,617 ) Recoveries 4,569 97,137 73,325 — 38,199 — 213,230 Provision (12,501 ) 93,478 (55,544 ) (67,891 ) (33,191 ) 75,649 — Balance at end of period $ 672,754 $ 6,102,221 $ 417,326 $ 425,012 $ 8,376 $ 859,297 $ 8,484,986 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Loans: Ending balance: individually evaluated for impairment $ 1,643,734 $ 8,686,630 $ 78,533 $ — $ — $ 10,408,897 Ending balance: collectively evaluated for impairment 173,180,340 348,263,215 29,999,557 70,188,946 4,853,911 626,485,969 Ending balance $ 174,824,074 $ 356,949,845 $ 30,078,090 $ 70,188,946 $ 4,853,911 $ 636,894,866 Three Months Ended June 30, 2014 1-4 family real estate Commercial real estate Commercial Real estate construction Consumer and other Unallocated Total Allowance for loan losses: Balance at beginning of period $ 671,496 $ 6,498,419 $ 441,323 $ 405,500 $ 51,580 $ 362,299 $ 8,430,617 Charge-offs (89,600 ) (49,202 ) — — (99,414 ) — (238,216 ) Recoveries — — 12,828 — 469 — 13,297 Provision 179,933 (690,453 ) (74,832 ) 40,611 100,849 443,892 — Transfer of allowance on previously covered NCB non-single family loans 1,596 394,791 3,470 — 143 — 400,000 Balance at end of period $ 763,425 $ 6,153,555 $ 382,789 $ 446,111 $ 53,627 $ 806,191 $ 8,605,698 Nine Months Ended June 30, 2014 1-4 family real estate Commercial real estate Commercial Real estate construction Consumer and other Unallocated Total Allowance for loan losses: Balance at beginning of period $ 862,043 $ 5,446,357 $ 455,833 $ 387,302 $ 124,717 $ 912,644 $ 8,188,896 Charge-offs (189,979 ) (79,639 ) (22,035 ) — (107,062 ) — (398,715 ) Recoveries — 70,231 41,890 — 3,396 — 115,517 Provision 89,765 321,815 (96,369 ) 58,809 32,433 (106,453 ) 300,000 Transfer of allowance on previously covered NCB non-single family loans 1,596 394,791 3,470 — 143 — 400,000 Balance at end of period $ 763,425 $ 6,153,555 $ 382,789 $ 446,111 $ 53,627 $ 806,191 $ 8,605,698 Ending balance: individually evaluated for impairment $ — $ — $ — $ — $ — $ — Loans: Ending balance: individually eva |
