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Loans, Allowance for Credit Losses, and Asset Quality Information (Tables)
 3 Months Ended
Mar. 31, 2023
Receivables [Abstract]  
Summary of Major Categories of Total Loans Outstanding
The following is a summary of the major categories of total loans outstanding:
($ in thousands)March 31, 2023December 31, 2022
 AmountPercentageAmountPercentage
All  loans:
Commercial, financial, and agricultural$885,032 11 %$641,941 9 %
Real estate – construction, land development & other land loans1,092,026 14 %934,176 14 %
Real estate mortgage – residential (1-4 family) first mortgages1,386,580 18 %1,195,785 18 %
Real estate mortgage – home equity loans / lines of credit342,287 4 %323,726 5 %
Real estate mortgage – commercial and other4,026,258 52 %3,510,261 53 %
Consumer loans68,056 1 %60,659 1 %
Subtotal7,800,239 100 %6,666,548 100 %
Unamortized net deferred loan fees(1,276)(1,403)
Total loans$7,798,963 $6,665,145 

Also included in the table above are various SBA loans, generally originated under the SBA 7A program, with additional information on these loans presented in the table below.
($ in thousands)March 31, 2023December 31, 2022
Guaranteed portions of SBA loans included in table above$36,035 31,893 
Unguaranteed portions of SBA loans included in table above115,413 116,910 
Total SBA loans included in the table above$151,448 148,803 
Sold portions of SBA loans with servicing retained - not included in tables above$380,634 392,370 
Schedule of Nonperforming Assets and Nonaccrual Loans
Nonperforming assets are defined as nonaccrual loans, modifications to borrowers in financial distress, loans past due 90 or more days and still accruing interest, foreclosed real estate, and prior to the adoption of ASU 2022-02 on January 1, 2023, TDRs.
Nonperforming assets are summarized as follows.
($ in thousands)March 31,
2023		December 31,
2022
Nonaccrual loans$28,059 28,514 
Modifications to borrowers in financial distress2,224 — 
TDRs - accruing— 9,121 
Total nonperforming loans30,283 37,635 
Foreclosed real estate789 658 
Total nonperforming assets$31,072 38,293 
The following table is a summary of the Company’s nonaccrual loans by major categories as of March 31, 2023:
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial, financial, and agricultural$36 10,752 10,788 
Real estate – construction, land development & other land loans— 123 123 
Real estate mortgage – residential (1-4 family) first mortgages— 3,026 3,026 
Real estate mortgage – home equity loans / lines of credit— 1,781 1,781 
Real estate mortgage – commercial and other4,059 8,096 12,155 
Consumer loans— 186 186 
Total$4,095 23,964 28,059 


The following table is a summary of the Company’s nonaccrual loans by major categories as of December 31, 2022:
($ in thousands)Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual Loans
Commercial, financial, and agricultural$3,855 6,374 10,229 
Real estate – construction, land development & other land loans— 1,009 1,009 
Real estate mortgage – residential (1-4 family) first mortgages157 3,132 3,289 
Real estate mortgage – home equity loans / lines of credit— 1,397 1,397 
Real estate mortgage – commercial and other5,010 7,495 12,505 
Consumer loans— 85 85 
Total$9,022 19,492 28,514 
Summary of Accrued Interest Receivables Written Off
The following table represents the accrued interest receivables written off by reversing interest income during each period indicated:
($ in thousands)Three Months Ended March 31, 2023For the Year Ended December 31, 2022Three Months Ended March 31, 2022
Commercial, financial, and agricultural$123 102 8 
Real estate – construction, land development & other land loans— 16 12 
Real estate mortgage – residential (1-4 family) first mortgages8 45 10 
Real estate mortgage – home equity loans / lines of credit9 20 2 
Real estate mortgage – commercial and other16 139 100 
Consumer loans— 2 — 
Total$156 324 132 
Schedule of Analysis of Payment Status
The following table presents an analysis of the payment status of the Company’s loans as of March 31, 2023:
($ in thousands)Accruing
30-59
Days Past
Due		Accruing
60-89
Days
Past
Due		Accruing
90 Days
or More
Past
Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial, financial, and agricultural$1,329 392 — 10,788 872,523 885,032 
Real estate – construction, land development & other land loans233 52 — 123 1,091,618 1,092,026 
Real estate mortgage – residential (1-4 family) first mortgages8,806 95 — 3,026 1,374,653 1,386,580 
Real estate mortgage – home equity loans / lines of credit807 139 — 1,781 339,560 342,287 
Real estate mortgage – commercial and other1,896 725 — 12,155 4,011,482 4,026,258 
Consumer loans252 65 — 186 67,553 68,056 
Total$13,323 1,468 — 28,059 7,757,389 7,800,239 
Unamortized net deferred loan fees(1,276)
Total loans7,798,963 
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2022:
($ in thousands)Accruing
30-59
Days
Past
Due		Accruing
60-89
Days
Past
Due		Accruing
90 Days
or More
Past
Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial, financial, and agricultural$438 565 — 10,229 630,709 641,941 
Real estate – construction, land development & other land loans238 1,687 — 1,009 931,242 934,176 
Real estate mortgage – residential (1-4 family) first mortgages3,415 25 — 3,289 1,189,056 1,195,785 
Real estate mortgage – home equity loans / lines of credit457 371 — 1,397 321,501 323,726 
Real estate mortgage – commercial and other620 97 — 12,505 3,497,039 3,510,261 
Consumer loans249 66 — 85 60,259 60,659 
Total$5,417 2,811 — 28,514 6,629,806 6,666,548 
Unamortized net deferred loan fees(1,403)
Total loans$6,665,145 
Analysis of Collateral-Dependent Loans
The following table presents an analysis of collateral dependent loans of the Company as of March 31, 2023:
($ in thousands)Residential PropertyBusiness AssetsLandCommercial PropertyTotal Collateral-Dependent Loans
Commercial, financial, and agricultural$— 3,085 — — 3,085 
Real estate mortgage – commercial and other— — — 4,718 4,718 
Total$— 3,085 — 4,718 7,803 

The following table presents an analysis of collateral dependent loans of the Company as of December 31, 2022:
($ in thousands)Residential PropertyBusiness AssetsLandCommercial PropertyTotal Collateral-Dependent Loans
Commercial, financial, and agricultural$— 6,394 — — 6,394 
Real estate mortgage – residential (1-4 family) first mortgages157 — — — 157 
Real estate mortgage – commercial and other— — — 6,723 6,723 
Total$157 6,394 — 6,723 13,274 
Schedule of Allowance for Loan Losses
The following tables presents the activity in the ACL on loans for each of the periods indicated. Fluctuations in the ACL each period are based on loan mix and growth, changes in the levels of nonperforming loans, economic forecasts impacting loss drivers, other assumptions and inputs to the CECL model, and as occurred in 2023, adjustments for acquired loan portfolios. Much of the change to the level of ACL during the three months ended March 31, 2023 is attributed to the acquisition of GrandSouth. In addition to the "Day 1" allowance recorded for PCD loans of $5.6 million, the Company recorded a "Day 2" initial provision of $12.2 million related to the non-PCD loans in the GrandSouth portfolio. The balance of the change was a result of updated economic forecast inputs to our CECL model driving lower loss rate assumptions, primarily due to slightly improved unemployment and GDP forecasts.
($ in thousands)Commercial, financial, and agriculturalReal estate – construction, land development & other land loansReal estate mortgage – residential (1-4 family) first mortgagesReal estate mortgage – home equity loans / lines of creditReal estate mortgage – commercial and otherConsumer loansTotal
As of and for the three months ended March 31, 2023
Beginning balance$17,718 15,128 11,354 3,158 40,709 2,900 90,967 
"Day 1" ACL for acquired PCD loans5,197 49 113 8 242 1 5,610 
Charge-offs(2,177)— — (2)(235)(207)(2,621)
Recoveries274 65 146 34 434 36 989 
Provisions / (Reversals)2,061 3,744 672 283 4,126 565 11,451 
Ending balance$23,073 18,986 12,285 3,481 45,276 3,295 106,396 

($ in thousands)Commercial, financial, and agriculturalReal estate – construction, land development & other land loansReal estate mortgage – residential (1-4 family) first mortgagesReal estate mortgage – home equity loans / lines of creditReal estate mortgage – commercial and otherConsumer loansTotal
As of and for the year ended December 31, 2022
Beginning balance$16,249 16,519 8,686 4,337 30,342 2,656 78,789 
Charge-offs(2,519)— — (43)(1,063)(840)(4,465)
Recoveries756 480 17 600 1,983 207 4,043 
Provisions/(Reversals)3,232 (1,871)2,651 (1,736)9,447 877 12,600 
Ending balance$17,718 15,128 11,354 3,158 40,709 2,900 90,967 

($ in thousands)Commercial, financial, and agriculturalReal estate – construction, land development & other land loansReal estate mortgage – residential (1-4 family) first mortgagesReal estate mortgage – home equity loans / lines of creditReal estate mortgage – commercial and otherConsumer loansTotal
As of and for the three months ended March 31, 2022
Beginning balance$16,249 16,519 8,686 4,337 30,342 2,656 78,789 
Charge-offs(790)— — (41)(45)(167)(1,043)
Recoveries247 137 4 233 155 47 823 
Provisions/(Reversals)307 (599)(531)(2,455)6,875 (97)3,500 
Ending balance$16,013 16,057 8,159 2,074 37,327 2,439 82,069 
The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the three months ended March 31, 2023 and 2022 and for the twelve months ended December 31, 2022:
($ in thousands)March 31, 2023December 31, 2022March 31, 2022
Beginning balance$13,306 13,506 13,506 
"Day 2" provision for credit losses on unfunded commitments acquired from GrandSouth1,921 — — 
Charge-offs— — — 
Recoveries— — — 
Reversal of provision for unfunded commitments(870)(200)(1,500)
Ending balance$14,357 13,306 12,006 
Schedule of Recorded Investment in Loans by Credit Quality Indicators
The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
Risk GradeDescription
Pass:
1Loans with virtually no risk, including cash secured loans.
2Loans with documented significant overall financial strength.  These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
3Loans with documented satisfactory overall financial strength.  These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
4Loans to borrowers with acceptable financial condition.  These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.  
5Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management.  Collateral is generally required and felt to provide reasonable coverage with realizable liquidation values in normal circumstances.  Repayment performance is satisfactory.
P
(Pass)		Consumer loans that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels.  These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.  
Special Mention:
6Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Bank.
Classified:
7An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.  These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
8Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable.  Loss appears imminent, but the exact amount and timing is uncertain.
9Loans that are considered uncollectible and are in the process of being charged-off.  This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
F
(Fail)		Consumer loans with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.

In the tables that follow, substantially all of the "Classified Loans" have grades of 7 or Fail, with those categories having similar levels of risk.

The tables below present the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of the periods indicated. Acquired loans are presented in the year originated, not in the year of acquisition.
Term Loans by Year of Origination
($ in thousands)20232022202120202019PriorRevolvingTotal
As of March 31, 2023
Commercial, financial, and agricultural
Pass$30,973 191,669 133,914 90,094 54,372 72,590 295,435 869,047 
Special Mention362 233 367 529 1,164 914 109 3,678 
Classified— 1,020 1,990 1,651 1,618 5,346 682 12,307 
Total commercial, financial, and agricultural31,335 192,922 136,271 92,274 57,154 78,850 296,226 885,032 
Gross charge-offs, YTD— 129 691 21 299 651 386 2,177 
Real estate – construction, land development & other land loans
Pass170,337 570,389 221,325 46,235 15,108 10,720 51,065 1,085,179 
Special Mention389 5,220 — 1 — 102 12 5,724 
Classified530 272 86 32 19 160 24 1,123 
Total real estate – construction, land development & other land loans171,256 575,881 221,411 46,268 15,127 10,982 51,101 1,092,026 
Gross charge-offs, YTD— — — — — — — — 
Real estate mortgage – residential (1-4 family) first mortgages
Pass70,953 376,734 317,648 205,073 102,510 297,101 1,770 1,371,789 
Special Mention— 748 203 106 647 2,110 19 3,833 
Classified— 538 130 397 403 8,801 689 10,958 
Total real estate mortgage – residential (1-4 family) first mortgages70,953 378,020 317,981 205,576 103,560 308,012 2,478 1,386,580 
Gross charge-offs, YTD— — — — — — — — 
Real estate mortgage – home equity loans / lines of credit
Pass624 5,439 1,732 1,338 219 1,883 322,004 333,239 
Special Mention— 173 119 — — 17 123 432 
Classified13 91 153 93 92 276 7,898 8,616 
Total real estate mortgage – home equity loans / lines of credit637 5,703 2,004 1,431 311 2,176 330,025 342,287 
Gross charge-offs, YTD— — — — — — 2 2 
Real estate mortgage – commercial and other
Pass156,862 1,245,323 1,311,892 617,132 280,085 306,906 59,260 3,977,460 
Special Mention243 1,617 1,016 8,473 7,327 11,948 652 31,276 
Classified189 3,983 541 255 3,896 8,297 361 17,522 
Total real estate mortgage – commercial and other157,294 1,250,923 1,313,449 625,860 291,308 327,151 60,273 4,026,258 
Gross charge-offs, YTD— — 235 — — — — 235 
Consumer loans
Pass4,750 18,431 8,093 3,646 1,036 1,026 30,541 67,523 
Special Mention— — — — — — — — 
Classified235 173 35 — 6 15 69 533 
Total consumer loans4,985 18,604 8,128 3,646 1,042 1,041 30,610 68,056 
Gross charge-offs, YTD— — 11 3 — — 193 207 
Total loans$436,460 2,422,053 1,999,244 975,055 468,502 728,212 770,713 7,800,239 
Unamortized net deferred loan fees(1,276)
Total loans, net of deferred loan fees7,798,963 
Total gross charge-offs, year to date$— 129 937 24 299 651 581 2,621 
Term Loans by Year of Origination
($ in thousands)20222021202020192018PriorRevolvingTotal
As of December 31, 2022
Commercial, financial, and agricultural
Pass$185,167 107,747 85,110 51,274 590 76,588 120,590 627,066 
Special Mention342 166 648 1,312 — 990 332 3,790 
Classified734 1,909 808 1,384 — 5,762 488 11,085 
Total commercial, financial, and agricultural186,243 109,822 86,566 53,970 590 83,340 121,410 641,941 
Real estate – construction, land development & other land loans
Pass550,752 267,096 42,421 30,973 — 12,722 19,519 923,483 
Special Mention5,128 5 3,679 — — 100 13 8,925 
Classified656 107 38 899 — 44 24 1,768 
Total real estate – construction, land development & other land loans556,536 267,208 46,138 31,872 — 12,866 19,556 934,176 
Real estate mortgage – residential (1-4 family) first mortgages
Pass317,282 274,756 186,102 98,559 185 301,885 1,379 1,180,148 
Special Mention1,189 127 110 470 — 2,416 — 4,312 
Classified763 251 221 359 — 9,072 659 11,325 
Total real estate – mortgage – residential (1-4 family) first mortgages319,234 275,134 186,433 99,388 185 313,373 2,038 1,195,785 
Real estate mortgage – home equity loans / lines of credit
Pass869 1,091 349 237 — 2,020 309,786 314,352 
Special Mention175 — — — — 18 1,072 1,265 
Classified106 156 94 87 — 213 7,453 8,109 
Total real estate – mortgage – home equity loans / lines of credit1,150 1,247 443 324 — 2,251 318,311 323,726 
Real estate mortgage – commercial and other
Pass1,096,643 1,186,678 569,624 247,448 179 324,361 48,882 3,473,815 
Special Mention1,715 1,114 4,436 8,289 — 4,457 665 20,676 
Classified3,480 1,265 84 2,456 — 8,118 367 15,770 
Total real estate mortgage – commercial and other1,101,838 1,189,057 574,144 258,193 179 336,936 49,914 3,510,261 
Consumer loans
Pass35,406 7,946 3,610 1,056 3 1,250 10,953 60,224 
Special Mention— — — — — — — — 
Classified320 31 3 1 — 25 55 435 
Total consumer loans35,726 7,977 3,613 1,057 3 1,275 11,008 60,659 
Total loans$2,200,727 1,850,445 897,337 444,804 957 750,041 522,237 6,666,548 
Unamortized net deferred loan fees(1,403)
Total loans, net of deferred loan fees6,665,145 
Schedule of Information Related to Loans Modified in a Troubled Debt Restructuring
The followings tables present the amortized cost basis at March 31, 2023 of the loans modified for borrowers experiencing financial difficulty, by loan category and type of concession granted. Percentages labeled as "NM" are not measurable to the class of financing receivable, as they are less than 0.1% of the total class.
Payment Delay
($ in thousands)Amortized Cost Basis at 3/31/2023Percent of Total Class of Financing Receivable
Commercial, financial, and agricultural$156 NM
$156 
Term Extension
($ in thousands)Amortized Cost Basis at 3/31/2023Percent of Total Class of Financing Receivable
Commercial, financial, and agricultural$1,442 0.2 %
Real estate – construction, land development & other land loans130 NM
Real estate mortgage – residential (1-4 family) first mortgages48 NM
Real estate mortgage – home equity loans / lines of credit103 NM
Real estate mortgage – commercial and other104 NM
Consumer loans228 0.3 %
$2,055 
Combination - Interest Rate Reduction and Term Extension
($ in thousands)Amortized Cost Basis at 3/31/2023Percent of Total Class of Financing Receivable
Real estate – construction, land development & other land loans$14 NM
$14 
For the three months ended March 31, 2023, there were no modifications for borrowers experiencing financial difficulty with principal forgiveness concessions.
The following tables describes the financial effect for the three months ended March 31, 2023 of the modifications made for borrowers experiencing financial difficulty:
Payment Delay
Loan TypeFinancial Effect
Commercial, financial, and agricultural
Delayed payment for 4 months.
Term Extension
Loan TypeFinancial Effect
Commercial, financial, and agricultural
Added a weighted average 6 months to the life of loans, which reduced monthly payment amounts to borrowers.
Real estate – construction, land development & other land loans
Added a weighted average 11 months to the life of loans, which reduced monthly payment amounts to borrowers.
Real estate mortgage – residential (1-4 family) first mortgages
Added a weighted average 14 months to the life of loans, which reduced monthly payment amounts to borrowers.
Real estate mortgage – home equity loans / lines of credit
Added a weighted average 46 months to the life of loans, which reduced monthly payment amounts to borrowers.
Real estate mortgage – commercial and other
Added a weighted average 12 months to the life of loans, which reduced monthly payment amounts to borrowers.
Consumer loans
Added a weighted average 3 months to the life of loans, which reduced monthly payment amounts to borrowers.
Interest Rate Reduction
Loan TypeFinancial Effect
Real estate – construction, land development & other land loans
Reduced weighted average contractual interest rate from 7.0% to 5.5%
The Company closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified in the last 12 months (numbers in thousands):
Payment Status (Amortized Cost Basis)
($ in thousands)Current30-59 Days Past Due60-89 Days Past Due90+ Days Past Due
Commercial, financial, and agricultural$1,363 156 79 — 
Real estate – construction, land development & other land loans144 — — — 
Real estate mortgage – residential (1-4 family) first mortgages48 — — — 
Real estate mortgage – home equity loans / lines of credit103 — — — 
Real estate mortgage – commercial and other104 — — — 
Consumer loans228 — — — 
$1,990 156 79 — 
Summary of Troubled Debt Restructuring
The following table presents information related to loans modified in a TDR during the three months ended March 31, 2022.
For the three months ended March 31, 2022
($ in thousands)Number of ContractsPre-Modification Restructured BalancesPost-Modification Restructured Balances
TDRs - Accruing
Real estate mortgage – residential (1-4 family) first mortgages1 $36 36 
TDRs - Nonaccrual
Commercial, financial, and agricultural1 41 41 
Real estate mortgage – residential (1-4 family) first mortgages1 36 36 
Real estate mortgage – commercial and other1 540 540 
Total TDRs arising during period4 $653 653