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:


	June 30, 2014					December 31, 2013
(Amounts in thousands)	Amount		Percent			Amount		Percent
Non-covered loans held for investment
Commercial loans
Construction, development, and other land	$	44,653		2.54	%	$	35,255		2.06	%
Commercial and industrial		94,359		5.36	%		95,455		5.58	%
Multi-family residential		88,456		5.02	%		70,197		4.10	%
Single family non-owner occupied		141,376		8.04	%		135,559		7.92	%
Non-farm, non-residential		498,096		28.31	%		475,911		27.82	%
Agricultural		2,443		0.14	%		2,324		0.14	%
Farmland		32,396		1.84	%		32,614		1.91	%

Total commercial loans		901,779		51.25	%		847,315		49.53	%
Consumer real estate loans
Home equity lines		112,621		6.40	%		111,770		6.53	%
Single family owner occupied		490,626		27.89	%		496,012		28.99	%
Owner occupied construction		40,212		2.29	%		28,703		1.68	%

Total consumer real estate loans		643,459		36.58	%		636,485		37.20	%
Consumer and other loans
Consumer loans		74,100		4.21	%		71,313		4.17	%
Other		7,369		0.42	%		3,926		0.23	%

Total consumer and other loans		81,469		4.63	%		75,239		4.40	%

Total non-covered loans		1,626,707		92.46	%		1,559,039		91.13	%
Total covered loans		132,717		7.54	%		151,682		8.87	%

Total loans held for investment, net of unearned income	$	1,759,424		100.00	%	$	1,710,721		100.00	%

Loans held for sale	$	459				$	883

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


(Amounts in thousands)	June 30, 2014		December 31, 2013
Covered loans
Commercial loans
Construction, development, and other land	$	15,043	$	15,865
Commercial and industrial		2,855		3,325
Multi-family residential		1,662		1,933
Single family non-owner occupied		6,443		7,449
Non-farm, non-residential		27,478		34,646
Agricultural		153		164
Farmland		803		873

Total commercial loans		54,437		64,255
Consumer real estate loans
Home equity lines		64,260		69,206
Single family owner occupied		13,534		16,919
Owner occupied construction		385		1,184

Total consumer real estate loans		78,179		87,309
Consumer and other loans
Consumer loans		101		118

Total covered loans	$	132,717	$	151,682

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, June 30, 2013		17,484		90,105		2,088		109,677
Unpaid principal balance, June 30, 2013		24,882		124,568		5,591		155,041
Carrying balance, January 1, 2014	$	9,196	$	70,584	$	1,931	$	81,711
Carrying balance, June 30, 2014		7,862		59,062		1,903		68,827
Unpaid principal balance, June 30, 2014		15,216		92,368		5,339		112,923

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
Six months ended June 30, 2013
Beginning balance	$	2,342		$	21,886		$	15		$	24,243
Additions		148			178			—			326
Accretion		(846	)		(2,900	)		(99	)		(3,845	)
Reclassifications from (to) nonaccretable difference		4,695			(9,104	)		92			(4,317	)
Removal events		(1,203	)		(1,581	)		—			(2,784	)

Ending balance	$	5,136		$	8,479		$	8		$	13,623

Six months ended June 30, 2014
Beginning balance	$	5,294		$	10,338		$	8		$	15,640
Additions		70			20			—			90
Accretion		(1,096	)		(3,019	)		(23	)		(4,138	)
Reclassifications from nonaccretable difference		513			11,603			23			12,139
Removal events		(467	)		(1,046	)		—			(1,513	)

Ending balance	$	4,314		$	17,896		$	8		$	22,218

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