b'Allowance for Credit Losses and Recorded Investment in LoansDecember 31, 20181a1 & 1a2 1b 1c2a, 1c2b, 1c1, 1d 1e1 & 1e2 46b, 6c & 6d excess from reserve analysisalong with factor 10 reserveSecured by construction,Secured bySecured by land and landSecured byresidentialnonfarmCommercial andLoans to development farmland properties nonresidential industrial loans individuals Leases Unallocated TotalAllowance for credit losses:Beginning balance $ 652,723 $ -$1 ,759,491 $9 64,264 $95,015 $ 124,574 $ 2 82 $ 93,851 $ 3 ,690,200Charged off loans- -1 49,002 229,876- - 378,878Recoveries of previously charged off loans38,091 -2 6,446-3 9,81549,453 153,805Provision for (recovery of) loan losses( 309,422)-422,936 (232,786)8 ,862 2 24,8591 486,796201,259Ending balance $ 381,392 $ -$2 ,059,871 $ 731,478 $143,692 $ 169,010 $ 2 96 $ 180,647 $3,666,386Ending balance: individuallyevaluated for impairment $ 3 74 $- $11,965 $ 4 30 $ - $- $- $- $ 12,769Ending balance: collectivelyevaluated for impairment $3 81,018 $ -$ 2,047,906 $7 31,048 $ 1 43,692 $ 169,010 $ 2 96 $ 180,647 $ 3 ,653,617Loan receivables:Ending balance $25,821,298 $- $ 185,596,584 $ 7 1,738,044 $1 4,234,852 $5,449,741 $3 8,252 $- $302,878,771Ending balance: individuallyevaluated for impairment $7 1,944 $ -$ 2,497,173 $6 21,152 $70,423 $- $ -$- $3,260,692Ending balance: collectivelyevaluated for impairment $ 2 5,749,354 $ -$ 183,099,411 $ 7 1,116,892 $1 4,164,429 $5,449,741 $ 38,252 $- $299,618,079 A summary of transactions in the allowance for loan and lease losses for the years ended December 31, 2019 and 2018, respectively follows:2019 2018Balance, beginning$ 3,666,386 $3,690,200Charged off loans (1,000,984) (378,878)Recoveries of loans previously charged off157,099153,805Provision charged to (recovery from)operations 435,000 201,259Balance, ending $ 3,257,501 $ 3,666,386 The Bank utilizes loan risk grades from 1 through 10.Under the rating system, the Banks policies, consistent with regulatory guidelines, provide for the classification of loans and other assets that are considered to be of lesser quality as substandard (8), doubtful (9) or loss (10) assets.Loans graded 16 are loans with acceptable risk.A loan graded special mention (7) is considered less than acceptable risk due to potential weaknesses that deserve managements close attention.An asset is considered substandard (8) if it is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.Key characteristics are negative trends in cash flow, profitability, net worth, liquidity or leverage, significant deviation from the original repayment source, numerous extensions and/or renewals, diversion of repayment funds, delinquency, failure to clean-up a short term operating line and/or whenever debt is carried over.Assets classified as doubtful (9) have all the weaknesses inherent in those classified substandard (8) with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values highly questionable and improbable.Key characteristics are weaknesses noted for loans classified substandard and not readily identified loss and/or undetermined value of collateral.Assets classified as loss (10) are considered uncollectible and of such little value that their continuance as 19'