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 table presents loans, net of unearned income and disaggregated by class, as of the periods indicated:


	March 31, 2014					December 31, 2013
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	45,661		2.64	%	$	35,255		2.06	%
Commercial and industrial		94,403		5.45	%		95,455		5.58	%
Multi-family residential		75,594		4.36	%		70,197		4.10	%
Single family non-owner occupied		137,969		7.97	%		135,559		7.92	%
Non-farm, non-residential		484,361		27.97	%		475,911		27.82	%
Agricultural		2,093		0.12	%		2,324		0.14	%
Farmland		32,410		1.87	%		32,614		1.91	%

Total commercial loans		872,491		50.38	%		847,315		49.53	%
Consumer real estate loans
Home equity lines		113,137		6.53	%		111,770		6.53	%
Single family owner occupied		492,627		28.45	%		496,012		28.99	%
Owner occupied construction		34,360		1.98	%		28,703		1.68	%

Total consumer real estate loans		640,124		36.96	%		636,485		37.20	%
Consumer and other loans
Consumer loans		72,111		4.16	%		71,313		4.17	%
Other		3,968		0.23	%		3,926		0.23	%

Total consumer and other loans		76,079		4.39	%		75,239		4.40	%

Total non-covered loans		1,588,694		91.73	%		1,559,039		91.13	%
Total covered loans		143,170		8.27	%		151,682		8.87	%

Total loans held for investment, net of unearned income	$	1,731,864		100.00	%	$	1,710,721		100.00	%

Loans held for sale	$	1,743				$	883

The following table presents the components of the Company’s covered loan portfolio, disaggregated by class, as of the dates indicated:


	March 31,		December 31,
(Amounts in thousands)	2014		2013
Covered loans
Commercial loans
Construction, development, and other land	$	15,956	$	15,865
Commercial and industrial		3,062		3,325
Multi-family residential		1,903		1,933
Single family non-owner occupied		6,794		7,449
Non-farm, non-residential		31,458		34,646
Agricultural		162		164
Farmland		817		873

Total commercial loans		60,152		64,255
Consumer real estate loans
Home equity lines		66,895		69,206
Single family owner occupied		15,287		16,919
Owner occupied construction		727		1,184

Total consumer real estate loans		82,909		87,309
Consumer and other loans
Consumer loans		109		118

Total covered loans	$	143,170	$	151,682

For information concerning off-balance sheet financing, see Note 13, “Litigation, Commitments and Contingencies,” to the Condensed Consolidated Financial Statements of this report.

Purchased Credit Impaired Loans

When the fair values of purchased loans are established at acquisition, certain loans are identified as impaired. These purchased credit impaired (“PCI”) loans are aggregated into loan pools that have common risk characteristics. The Company’s loan pools consist of Waccamaw commercial, Waccamaw lines of credit, Peoples commercial, Waccamaw serviced home equity lines, Waccamaw residential, Peoples residential, and Waccamaw consumer. The Company estimates cash flows to be collected on PCI loans and discounts those cash flows at a market rate of interest. The following table presents the carrying and contractual unpaid principal balance of PCI loans, by acquisition, as of the dates indicated:


(Amounts in thousands)	Peoples		Waccamaw		Other		Total
Carrying balance, January 1, 2013	$	26,907	$	112,093	$	2,340	$	141,340
Carrying balance, March 31, 2013		21,715		96,537		2,364		120,616
Unpaid principal balance, March 31, 2013		28,821		134,158		5,892		168,871
Carrying balance, January 1, 2014	$	9,196	$	70,584	$	1,931	$	81,711
Carrying balance, March 31, 2014		9,196		65,780		1,918		76,894
Unpaid principal balance, March 31, 2014		16,825		99,582		5,385		121,792

The following table presents the activity in the accretable yield related to PCI loans, by acquisition, in the periods indicated:


(Amounts in thousands)	Peoples			Waccamaw			Other			Total
Balance, January 1, 2013	$	2,342		$	21,886		$	15		$	24,243
Additions		7			66			—			73
Accretion		(376	)		(1,385	)		(51	)		(1,812	)
Reclassifications from (to) nonaccretable difference		2,302			(12,482	)		46			(10,134	)
Disposals		(537	)		(585	)		—			(1,122	)

Balance, March 31, 2013	$	3,738		$	7,500		$	10		$	11,248

Balance, January 1, 2014	$	5,294		$	10,338		$	8		$	15,640
Additions		1			7			—			8
Accretion		(563	)		(1,563	)		(11	)		(2,137	)
Reclassifications from nonaccretable difference		337			8,977			11			9,325
Disposals		(112	)		(167	)		—			(279	)

Balance, March 31, 2014	$	4,957		$	17,592		$	8		$	22,557