ALLOWANCE FOR CREDIT LOSSES AND RESERVE FOR OFF-BALANCE SHEET CREDIT EXPOSURE

9 Months Ended

Sep. 30, 2020

ALLOWANCE FOR CREDIT LOSSES AND RESERVE FOR OFF-BALANCE SHEET CREDIT EXPOSURE

5. ALLOWANCE FOR CREDIT LOSSES AND RESERVE FOR OFF-BALANCE SHEET CREDIT EXPOSURES

The following table presents by class, the activity in the ACL for loans under ASC 326 during the three and nine months ended September 30, 2020 and under previous GAAP during the three and nine months ended September 30, 2019:


	Commercial, Financial and Agricultural				Real Estate
(dollars in thousands)	SBA PPP		Other		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Three Months Ended September 30, 2020


Beginning balance	388		15,507		3,274		15,025		3,651		16,148		13,346		67,339
Provision for credit losses on loans [1]	2		2,620		759		3,537		2,517		3,304		1,726		14,465

	390		18,127		4,033		18,562		6,168		19,452		15,072		81,804
Charge-offs	—		810		—		11		—		75		1,492		2,388
Recoveries	—		321		—		13		—		12		780		1,126
Net charge-offs (recoveries)	—		489		—		(2)		—		63		712		1,262
Ending balance	$	390	$	17,638	$	4,033	$	18,564	$	6,168	$	19,389	$	14,360	$	80,542



Three Months Ended September 30, 2019
Beginning balance	$	—	$	8,109	$	1,313	$	13,367	$	4,313	$	11,668	$	9,497	$	48,267
Provision for credit losses on loans	—		107		374		75		(45)		541		480		1,532
	—		8,216		1,687		13,442		4,268		12,209		9,977		49,799
Charge-offs	—		797		—		—		5		—		1,832		2,634
Recoveries	—		362		6		104		24		—		506		1,002
Net charge-offs (recoveries)	—		435		(6)		(104)		(19)		—		1,326		1,632
Ending balance	$	—	$	7,781	$	1,693	$	13,546	$	4,287	$	12,209	$	8,651	$	48,167


	Commercial, Financial and Agricultural				Real Estate
(dollars in thousands)	SBA PPP		Other		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Nine Months Ended September 30, 2020
Beginning balance prior to ASC 326	$	—	$	8,136	$	1,792	$	13,327	$	4,206	$	11,113	$	9,397	$	47,971
Impact of adoption of ASC 326	—		(627)		479		608		(1,614)		2,624		2,096		3,566
Balance after adoption of ASC 326	—		7,509		2,271		13,935		2,592		13,737		11,493		51,537
Provision for credit losses on loans [1]	390		11,511		1,631		4,478		3,545		5,712		7,167		34,434
	390		19,020		3,902		18,413		6,137		19,449		18,660		85,971
Charge-offs	—		2,350		—		63		—		75		6,335		8,823
Recoveries	—		968		131		214		31		15		2,035		3,394
Net charge-offs (recoveries)	—		1,382		(131)		(151)		(31)		60		4,300		5,429
Ending balance	$	390	$	17,638	$	4,033	$	18,564	$	6,168	$	19,389	$	14,360	$	80,542



Nine Months Ended September 30, 2019
Beginning balance	$	—	$	8,027	$	1,202	$	14,349	$	3,788	$	13,358	$	7,192	$	47,916
Provision for credit losses on loans	—		943		(113)		(1,301)		462		(1,174)		5,402		4,219
	—		8,970		1,089		13,048		4,250		12,184		12,594		52,135
Charge-offs	—		2,099		—		—		5		—		5,542		7,646
Recoveries	—		910		604		498		42		25		1,599		3,678
Net charge-offs (recoveries)	—		1,189		(604)		(498)		(37)		(25)		3,943		3,968
Ending balance	$	—	$	7,781	$	1,693	$	13,546	$	4,287	$	12,209	$	8,651	$	48,167

[1] The Company recorded a reserve on accrued interest receivable for loans on active payment forbearance or deferral, which were granted to borrowers impacted by the COVID-19 pandemic. This reserve was recorded as a contra-asset against accrued interest receivable with the offset to provision for credit losses. The provision for credit losses presented in this table excludes the provision for credit losses on accrued interest receivable of $0.2 million.

The following table presents the activity in the reserve for off-balance sheet credit exposures, included in other liabilities, under ASC 326 during the three and nine months ended September 30, 2020 and under previous GAAP during the three and nine months ended September 30, 2019.


(dollars in thousands)
Three Months Ended September 30, 2020


Beginning balance	$	4,383
Provision for off-balance sheet credit exposures	221
Ending balance	$	4,604

Three Months Ended September 30, 2019
Beginning balance	$	1,897


Provision for off-balance sheet credit exposures	(466)
Ending balance	$	1,431

Nine Months Ended September 30, 2020
Beginning balance prior to ASC 326	$	1,272
Impact of adoption of ASC 326	740
Balance after adoption of ASC 326	2,012
Provision for off-balance sheet credit exposures	2,592
Ending balance	$	4,604

Nine Months Ended September 30, 2019
Beginning balance	$	1,242


Provision for off-balance sheet credit exposures	189
Ending balance	$	1,431

In accordance with GAAP, other real estate assets are not included in our assessment of the ACL.

Our provision for credit losses on loans was $14.5 million and $34.4 million in the three and nine months ended September 30, 2020 under ASC 326, compared to $1.5 million and $4.2 million in the three and nine months ended September 30, 2019 under previous GAAP.