ALLOWANCE FOR LOAN AND LEASE LOSSES

12 Months Ended

Dec. 31, 2021

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

The following tables present by class, the activity in the ACL for loans under ASC 326 during the years ended December 31, 2021 and 2020 and under previous GAAP during the year ended December 31, 2019:


	Commercial, Financial and Agricultural				Real Estate
(Dollars in thousands)	SBA PPP		Other		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Year ended December 31, 2021
Beginning balance	$	304	$	18,717	$	4,277	$	16,484	$	5,449	$	22,163	$	15,875	$	83,269


(Credit) provision for credit losses on loans [1]	(227)		(7,684)		(1,528)		(4,379)		(949)		(3,825)		4,269		(14,323)
Subtotal	77		11,033		2,749		12,105		4,500		18,338		20,144		68,946
Charge-offs	—		1,723		—		—		—		—		4,402		6,125
Recoveries	—		1,004		1,159		358		9		73		2,673		5,276
Net charge-offs (recoveries)	—		719		(1,159)		(358)		(9)		(73)		1,729		849
Ending balance	$	77	$	10,314	$	3,908	$	12,463	$	4,509	$	18,411	$	18,415	$	68,097


	Commercial, Financial and Agricultural				Real Estate
(Dollars in thousands)	SBA PPP		Other		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Year ended December 31, 2020
Beginning balance	$	—	$	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]	304		13,077		1,875		2,383		2,824		8,485		9,982		38,930
Subtotal	304		20,586		4,146		16,318		5,416		22,222		21,475		90,467
Charge-offs	—		3,026		—		63		—		75		8,191		11,355
Recoveries	—		1,157		131		229		33		16		2,591		4,157
Net charge-offs (recoveries)	—		1,869		(131)		(166)		(33)		59		5,600		7,198
Ending balance	$	304	$	18,717	$	4,277	$	16,484	$	5,449	$	22,163	$	15,875	$	83,269


	Commercial, Financial and Agricultural				Real Estate
(Dollars in thousands)	SBA PPP		Other		Construction		Residential Mortgage		Home Equity		Commercial Mortgage		Consumer		Total
Year ended December 31, 2019
Beginning balance	$	—	$	8,027	$	1,202	$	14,349	$	3,788	$	13,358	$	7,192	$	47,916


Provision (credit) for credit losses on loans	—		1,413		(20)		(1,546)		381		(2,270)		8,359		6,317
Subtotal	—		9,440		1,182		12,803		4,169		11,088		15,551		54,233
Charge-offs	—		2,478		—		—		5		—		8,265		10,748
Recoveries	—		1,174		610		524		42		25		2,111		4,486
Net charge-offs	—		1,304		(610)		(524)		(37)		(25)		6,154		6,262
Ending balance	$	—	$	8,136	$	1,792	$	13,327	$	4,206	$	11,113	$	9,397	$	47,971

[1] In 2020, 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. Due to the significant decline in loans on active forbearance or deferral, the Company reversed the $0.2 million reserve during the second quarter of 2021 and no longer has a reserve on accrued interest receivable.as of December 31, 2021. The provision for credit losses presented in this table excludes the provision (credit) 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 years ended December 31, 2021 and 2020 and under previous GAAP during the year ended December 31, 2019.


	Year Ended December 31,
(Dollars in thousands)	2021		2020		2019
Balance, beginning of year	$	4,884	$	1,272	$	1,243
Impact of adoption of ASC 326	—		740		—
Balance after adoption of ASC 326	4,884		2,012		1,243
(Credit) provision for off-balance sheet credit exposures	(80)		2,872		29
Balance, end of year	$	4,804	$	4,884	$	1,272

In accordance with GAAP, loans held for sale and other real estate assets are not included in our assessment of the ACL.

In determining the amount of our ACL, we rely on an analysis of our loan portfolio, our experience and our evaluation of general economic conditions, as well as regulatory requirements and input. If our assumptions prove to be incorrect, our current ACL may not be sufficient to cover future credit losses and we may experience significant increases to our Provision.