Note 3. Loans

Loan Portfolio

The Company’s loans held for investment are grouped into three segments (commercial loans, consumer real estate loans, and consumer and other loans) with each segment divided into various classes. Covered loans are defined as loans acquired in FDIC-assisted transactions that are covered by loss share agreements. The following tables present loans, net of unearned income and disaggregated by class, for the periods indicated:


	September 30, 2013					December 31, 2012
(Amounts in thousands)	Amount		Percent			Amount		Percent
Covered loans	$	163,425		9.63	%	$	207,106		12.01	%
Non-covered loans
Commercial loans
Construction, development, and other land		55,791		3.29	%		57,434		3.33	%
Commercial and industrial		95,972		5.66	%		88,738		5.15	%
Multi-family residential		56,079		3.31	%		65,694		3.81	%
Single family non-owner occupied		132,253		7.79	%		135,912		7.88	%
Non-farm, non-residential		455,247		26.83	%		448,810		26.02	%
Agricultural		2,274		0.13	%		1,709		0.10	%
Farmland		31,885		1.88	%		34,570		2.00	%

Total commercial loans		829,501		48.89	%		832,867		48.29	%
Consumer real estate loans
Home equity lines		109,611		6.46	%		111,081		6.44	%
Single family owner occupied		492,424		29.02	%		473,547		27.46	%
Owner occupied construction		25,349		1.50	%		16,223		0.94	%

Total consumer real estate loans		627,384		36.98	%		600,851		34.84	%
Consumer and other loans
Consumer loans		71,679		4.22	%		78,163		4.53	%
Other		4,708		0.28	%		5,666		0.33	%

Total consumer and other loans		76,387		4.50	%		83,829		4.86	%

Total non-covered loans		1,533,272		90.37	%		1,517,547		87.99	%

Total loans held for investment, net of unearned income	$	1,696,697		100.00	%	$	1,724,653		100.00	%

Loans held for sale	$	825				$	6,672


(Amounts in thousands)	September 30, 2013		December 31, 2012
Covered loans
Commercial loans
Construction, development, and other land	$	17,979	$	26,595
Commercial and industrial		3,951		6,948
Multi-family residential		2,003		2,611
Single family non-owner occupied		8,142		11,428
Non-farm, non-residential		37,751		48,565
Agricultural		176		144
Farmland		1,014		1,091

Total commercial loans		71,016		97,382
Consumer real estate loans
Home equity lines		71,724		81,445
Single family owner occupied		19,253		22,961
Owner occupied construction		1,306		1,644

Total consumer real estate loans		92,283		106,050
Consumer and other loans
Consumer loans		126		3,674

Total covered loans	$	163,425	$	207,106

See Note 12, “Litigation, Commitments and Contingencies,” for information concerning the Company’s off-balance sheet credit risk related to lending activities.

Acquired Impaired Loans

When the fair values of acquired loans are established, certain loans are identified as impaired. The Company has estimated cash flows to be collected on acquired impaired loans and discounted those cash flows at a market rate of interest. The outstanding principal balance of acquired impaired loans was $139.46 million at September 30, 2013, $198.34 million at December 31, 2012, and $220.07 million at September 30, 2012. The following tables present the carrying balance of acquired impaired loans during the periods indicated:


	Nine Months Ended September 30, 2013
	Peoples		Waccamaw		Other		Total
(Amounts in thousands)
Balance, January 1	$	26,907	$	110,115	$	2,340	$	139,362
Balance, September 30		11,961		76,457		2,015		90,433


	Nine Months Ended September 30, 2012
	Peoples		Waccamaw		Other		Total
(Amounts in thousands)
Balance, January 1	$	—	$	—	$	2,886	$	2,886
Balance, September 30		30,898		115,125		2,314		148,337

The following tables present changes in the accretable yield on acquired impaired loans during the periods indicated:


	Nine Months Ended September 30, 2013
	Peoples			Waccamaw			Other			Total
(Amounts in thousands)
Balance, January 1, 2013	$	2,342		$	21,886		$	15		$	24,243
Additions		148			189			—			337
Accretion		(1,315	)		(4,558	)		(108	)		(5,981	)
Transfers to accretable discount (exit events), net		4,276			(6,477	)		101			(2,100	)
Disposals		(1,417	)		(2,127	)		—			(3,544	)

Balance, September 30, 2013	$	4,034		$	8,913		$	8		$	12,955


	Nine Months Ended September 30, 2012
	Peoples			Waccamaw			Other			Total
(Amounts in thousands)
Balance, January 1, 2012	$	—		$	—		$	919		$	919
Additions		3,400			26,481			—			29,881
Accretion		(399	)		(1,491	)		(1,198	)		(3,088	)
Transfers to accretable discount, net		—			—			139			139
Disposals		77			108			161			346

Balance, September 30, 2012	$	3,078		$	25,098		$	21		$	28,197