Annual Report 2017

Real Estate		Production and
Mortgage		Intermediate Term	Agribusiness	Other	Total
Allowance for loan losses : Balance as of December 31 , 2015	$ 4,035	$ 8,250	$ 2,544	$ 1,058	$ 15,887
Provision for ( reversal of ) loan losses	619	133	515	( 267 )	1,000
Loan recoveries	16	73	626	--	715
Loan charge-offs	( 763 )	( 399 )	( 12 )	--	( 1,174 )
Balance as of December 31 , 2016	$ 3,907	$ 8,057	$ 3,673	$ 791	$ 16,428
Ending balance : individually evaluated for impairment	$ 245	$ 202	$ --	$ --	$ 447
Ending balance : collectively evaluated for impairment	$ 3,662	$ 7,855	$ 3,673	$ 791	$ 15,981
Recorded investment in loans outstanding : Ending balance as of December 31 , 2016	$ 2,093,088	$ 772,205	$ 646,252	$ 184,868	$ 3,696,413
Ending balance : individually evaluated for impairment	$ 4,546	$ 2,843	$ --	$ --	$ 7,389
Ending balance : collectively evaluated for impairment	$ 2,088,542	$ 769,362	$ 646,252	$ 184,868	$ 3,689,024

Real Estate		Production and
Mortgage		Intermediate Term	Agribusiness	Other	Total
Allowance for loan losses : Balance as of December 31 , 2014	$ 3,665	$ 7,777	$ 2,362	$ 760	$ 14,564
Provision for ( reversal of ) loan losses	447	455	( 700 )	298	500
Loan recoveries	3	60	1,042	--	1,105
Loan charge-offs	( 80 )	( 42 )	( 160 )	--	( 282 )
Balance as of December 31 , 2015	$ 4,035	$ 8,250	$ 2,544	$ 1,058	$ 15,887
Ending balance : individually evaluated for impairment	$ 1,035	$ 279	$ --	$ --	$ 1,314
Ending balance : collectively evaluated for impairment	$ 3,000	$ 7,971	$ 2,544	$ 1,058	$ 14,573
Recorded investment in loans outstanding : Ending balance as of December 31 , 2015	$ 1,949,136	$ 787,684	$ 577,155	$ 172,244	$ 3,486,219
Ending balance : individually evaluated for impairment	$ 6,087	$ 2,726	$ 1,898	$ --	$ 10,711
Ending balance : collectively evaluated for impairment	$ 1,943,049	$ 784,958	$ 575,257	$ 172,244	$ 3,475,508

The recorded investment in the loan is the unpaid principal amount increased or decreased by applicable accrued interest and unamortized premium , discount , finance charges , and acquisition costs and may also reflect a previous direct charge-off of the investment .

NOTE 4 : INVESTMENT IN AGRIBANK

As of December 31 , 2017 , we were required by AgriBank to maintain an investment equal to 2.25 % of the average quarterly balance of our note payable , with an additional amount required on association growth in excess of a targeted growth rate if the District is also growing above a targeted growth rate .

We are also required to hold AgriBank stock related to our participation in the AgriBank Asset Pool Program . As of December 31 , 2017 , we were required to hold the greater of 8.0 % of the quarter-end balance in the program , or 2.0 % of the initial balance of loans sold into the program .

The balance of our investment in AgriBank , all required stock , was $ 79.1 million , $ 77.2 million , and $ 75.6 million at December 31 , 2017 , 2016 , and 2015 , respectively .

NOTE 5 : OTHER INVESTMENTS

We and other Farm Credit Institutions are among the limited partners for Rural Business Investment Companies ( RBICs ). Our total commitment is $ 5.0 million , with varying commitment end dates through September 2021 . Certain commitments may have an option to extend under certain circumstances . Our investments in the RBICs totaled $ 180 thousand at December 31 , 2017 .

The investments were evaluated for impairment . For the year ended December 31 , 2017 , we have not recognized any impairment on these investments .

NOTE 6 : NOTE PAYABLE TO AGRIBANK

Our note payable to AgriBank represents borrowings , in the form of a line of credit , to fund our loan portfolio . The line of credit is governed by a GFA and our assets serve as collateral .

Note Payable Information

( dollars in thousands )
As of December 31	2017	2016	2015

Line of credit $ 3,500,000 $ 3,350,000 $ 3,200,000 Outstanding principal under the line of credit 3,131,564 3,017,069 2,846,402 Interest rate 2.2 % 1.9 % 1.7 %

Annual Report 2017 | Page 31